Qantas 2013 Annual Report Download - page 113

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QANTAS ANNUAL REPORT 2013
Dened Contribution Superannuation Plans
The Qantas Group contributes to employee dened contribution
superannuation plans. Contributions to these plans are
recognised as an expense in the Consolidated Income
Statement as incurred.
Dened Benet Superannuation Plans
The Qantas Group’s net obligation with respect to dened
benet superannuation plans is calculated separately for each
plan. The Qantas Superannuation Plan has been split based
on the divisions which relate to accumulation members and
dened benet members. Only dened benet members are
included in the Qantas Group’s net obligation calculations.
The calculation estimates the amount of future benet that
employees have earned in return for their service in the current
and prior periods, which is discounted to determine its present
value and the fair value of any plan assets is deducted.
The discount rate used is the yields at balance sheet date
on State Government Bonds which have maturity dates
approximating the terms of Qantas’ obligations. The calculation
is performed by a qualied actuary using the projected unit
credit method.
In calculating the Qantas Group’s obligation with respect to a
plan, to the extent that any cumulative unrecognised actuarial
gain or loss exceeds 10 per cent of the greater of the present
value of the dened benet obligation and the fair value of plan
assets, that portion is recognised in the Consolidated Income
Statement over the expected average remaining working lives
of the active employees participating in the plan. Otherwise, the
actuarial gain or loss is not recognised.
Where the calculation results in plan assets exceeding plan
liabilities, the recognised asset is limited to the net total of any
unrecognised actuarial losses and past service costs and the
present value of any future refunds from the plan or reductions
in future contributions to the plan.
Past service cost is the increase in the present value of the
dened benet obligation for employee services in prior
periods, resulting in the current period from the introduction of,
or changes to, post-employment benets or other long-term
employee benets. Past service costs may either be positive
(where benets are introduced or improved) or negative (where
existing benets are reduced).
Various actuarial assumptions underpin the determination
of the Qantas Group’s dened benet obligation and are
discussed in Note 31.
Employee Termination Benets
Provisions for termination benets are only recognised when
there is a detailed formal plan for the termination and where
there is no realistic possibility of withdrawal.
T PROVISIONS
A provision is recognised if, as a result of a past event, there is
a present legal or constructive obligation that can be measured
reliably, and it is probable that an outow of economic benets
will be required to settle the obligation.
If the effect is material, a provision is determined by discounting
the expected future cash ows required to settle the obligation
at a pre-tax rate that reects current market assessments of
the time value of money and the risks specic to the liability.
Theunwinding of the discount is treated as a nance charge.
Dividends
A provision for dividends is recognised in the nancial year
in which the dividends are declared, for the entire amount,
regardless of the extent to which the dividend will be paid
incash.
Workers’ Compensation Insurance
The Qantas Group is a licensed self-insurer under the New
South Wales Workers’ Compensation Act, the Victorian Accident
Compensation Act and the Queensland Workers’ Compensation
and Rehabilitation Act. Qantas has made provision for all
notied assessed workers’ compensation liabilities, together
with an estimate of liabilities incurred but not reported, based
on an independent actuarial assessment. The provision is
discounted using pre-tax rates that reect current market
assessments of the time value of money and the risks specic to
the liabilities and have maturity dates approximating the terms
of Qantas’ obligations. Workers’ compensation for all remaining
employees is commercially insured.
U EARNINGS PER SHARE
Basic earnings per share is determined by dividing the
Qantas Group’s net prot attributable to members of the
Qantas Group by the weighted average number of shares
on issue during the year.
Diluted earnings per share is calculated after taking into
account the number of ordinary shares to be issued for no
consideration in relation to dilutive potential ordinary shares.
V CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash at bank and on
hand, cash at call and short-term money market securities and
term deposits that are readily convertible to a known amount of
cash and are subject to an insignicant risk of change in value.
W NET FINANCE COSTS
Net nance costs comprise interest payable on borrowings
calculated using the effective interest method, unwinding of the
discount on provisions and receivables, interest receivable on
funds invested, gains and losses on mark-to-market movement
in fair value hedges.
Finance income is recognised in the Consolidated Income
Statement as it accrues, using the effective interest method.
Finance costs are recognised in the Consolidated Income
Statement as incurred, except where interest costs relate to
qualifying assets in which case they are capitalised to the cost
of the assets. Qualifying assets are assets that necessarily
take a substantial period of time to be made ready for intended
use. Where funds are borrowed generally, borrowing costs are
capitalised using the average interest rate applicable to the
Qantas Group’s debt facilities.