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97
Qantas Annual Report 2006
Notes to the Financial Statements
for the year ended 30 June 2006
Qantas Group Qantas
2006
$M
2006
$M
RECONCILIATIONS CONTINUED
Onerous contracts
An onerous contract is a contract in which the unavoidable costs of meeting the obligations under it exceed the economic
benefit expected to be received under it. The Qantas Group has raised a provisions in respect of an operating lease on an
empty premises and grounded aircraft that cannot be cancelled or sub-let.
Balance at 1 July 9.2 7.0
Provisions made during the year 20.9 20.9
Payments made during the year (0.2) (0.2)
Balance at 30 June 29.9 27.7
Included in the Financial Statements as follows:
Current 27.2 26.6
Non-current 2.7 1.1
29.9 27.7
Insurance and other
Qantas self-insures for risks associated with worker’s compensation. Outstanding claims are recognised when an incident
occurs that may give rise to a claim and are measured at the cost that the entity expects to incur in settling the claims,
discounted using a government bond rate with a maturity approximating the terms of the obligation.
Balance at 1 July 94.6 82.9
Provisions made during the year 51.9 50.3
Payments made during the year (20.1) (19.7)
Balance at 30 June 126.4 113.5
Included in the Financial Statements as follows:
Current 23.9 19.6
Non-current 102.5 93.9
126.4 113.5
Superannuation
Qantas provides defined benefit superannuation benefits linked to final salaries which is fully funded. This provision
represents the present value of the Qantas Groups’ obligation for the related current service cost.
Balance at 1 July 51.4 51.4
Provisions made during the year 91.6 91.6
Payments made during the year (135.7) (135.7)
Balance at 30 June 7.3 7.3
Make good on property leases
The Qantas Group has certain property leases that require the property to be returned to the lessor in its original
condition. A provision has been raised for the expected cost of refurbishment at lease expiry.
Balance at 1 July 11.9 11.9
Provisions made during the year 0.9 0.9
Balance at 30 June 12.8 12.8