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113 Qantas Annual Report 2008
Notes to the Financial Statements
for the year ended 30 June 2008
Qantas Group Qantas
Reconciliations continued 2008
$M
2007
$M
2008
$M
2007
$M
Onerous contracts
An onerous contract is a contract in which the unavoidable costs
of meeting the obligations under the contract exceed the economic
benefi t expected to be received. The Qantas Group has raised this
provision in respect of operating leases on premises and grounded aircraft.
Balance as at 1 July 24.6 29.9 22.4 27.7
Provisions made 2.2 8.7 2.2 8.7
Payments made (20.6) (14.0) (20.0) (14.0)
Balance as at 30 June 6.2 24.6 4.6 22.4
Included in the Financial Statements as follows:
Current 4.7 9.3 4.3 8.7
Non-current 1.5 15.3 0.3 13.7
6.2 24.6 4.6 22.4
Insurance, legal and other
Qantas self-insures for risks associated with workers’ 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. Legal provisions include estimates
of the likely penalties to be incurred in relation to investigations into alleged
price fi xing.
Balance as at 1 July 178.5 124.4 171.6 113.5
Provisions made 90.7 78.8 90.7 75.9
Payments made (102.8) (24.7) (102.7) (17.8)
Balance as at 30 June 166.4 178.5 159.6 171.6
Included in the Financial Statements as follows:
Current 69.1 77.4 67.5 76.3
Non-current 97.3 101.1 92.1 95.3
166.4 178.5 159.6 171.6
Superannuation
Qantas provides a defi ned benefi t superannuation plan to some employees.
This provision represents the present-value of the Qantas Group’s obligation
for the related current service cost.
Balance as at 1 July –7. 3 –7.3
Payments made –(7.3) –(7.3)
Balance as at 30 June ––––
Make good on leased assets
The Qantas Group has leases that require the asset to be returned to the
lessor in certain condition. A provision has been raised for the present
value of the future expected cost at lease expiry.
Balance as at 1 July 33.7 17.5 26.6 12.8
Provisions made 7.9 16.2 3.0 13.8
Balance as at 30 June 41.6 33.7 29.6 26.6
22. Provisions continued
For personal use only