Air New Zealand 2015 Annual Report Download - page 24

Download and view the complete annual report

Please find page 24 of the 2015 Air New Zealand annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 68

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68

AIR NEW ZEALAND GROUP
Notes to the Financial Statements (continued)
As at 30 June 2015
22
15. Provisions
A provision is recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable
that an outflow of economic benefits will be required to settle the obligation, and the provision can be reliably measured.
AIRCRAFT
LEASE
RETURN COSTS
$M
RESTRUCTURING
$M
OTHER
$M
TOTAL
$M
Balance as at 1 July 2014
Amount provided
Amount utilised and released
Foreign exchange differences
173
63
(29)
46
14
7
(8)
-
9
2
(6)
-
196
72
(43)
46
Balance as at 30 June 2015 253 13 5271
Represented by:
Current
Non-current
40
213
10
3
4
1
54
217
Balance as at 30 June 2015 253 13 5271
Nature and purpose of provisions
Aircraft lease return costs
Where a commitment exists to maintain aircraft held under operating lease arrangements, a provision is made during the lease
term for the lease return obligations specified within those lease agreements. The provision is based upon historical experience,
manufacturers’ advice and, where appropriate, contractual obligations in determining the present value of the estimated
future costs of major airframe inspections and engine overhauls by making appropriate charges to the Statement of Financial
Performance, calculated by reference to the number of hours or cycles operated during the year. The provision is expected to be
utilised at the next inspection or overhaul.
Restructuring
Restructuring provisions are recognised when the Group is demonstrably committed, without realistic possibility of withdrawal,
to a formal detailed plan to terminate employment before the normal retirement date. Costs relating to ongoing activities are
not provided for.
Other
Other provisions include insurance, warranty and an onerous contract provision. Insurance and onerous contract provisions are
expected to be utilised within 12 months. Insurance provisions are based on historical claim experience. Warranty provisions
represent an estimate of potential liability for future rectification work in respect of past engineering services performed.
16. Other Liabilities
Liabilities in respect of employee entitlements are recognised in exchange for services rendered during the accounting period, but
which have not yet been compensated as at reporting date. These include annual leave, long service leave, retirement leave and
accrued compensation.
2015
$M
2014
$M
Current
Employee entitlements
Amounts owing to associates
Other liabilities (including defined benefit liabilities)
232
18
8
205
-
9
258 214
Non-current
Employee entitlements
Other liabilities
12
5
14
6
17 20