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99
Qantas Annual Report 2006
Notes to the Financial Statements
for the year ended 30 June 2006
19. Reserves continued
NATURE AND PURPOSE OF RESERVES
Employee compensation reserve
The employee compensation reserve represents the value of shares held by an equity compensation plan that the Qantas Group is required to include in the
consolidated Financial Statements. This reserve will be reversed against share capital when the underlying shares vest in the employee. No gain or loss is
recognised in the Qantas Group Income Statement on the purchase, sale, issue or cancellation of the Qantas Group’s own equity instruments.
Hedge reserve
The hedge reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged
transactions that have not yet occurred.
Fair value reserve
The fair value reserve includes the cumulative net change in the fair value of available-for-sale investments until the investment is derecognised.
Asset revaluation reserve
The asset revaluation reserve relates to property, plant and equipment measured at fair value in accordance with applicable Australian Accounting Standards.
Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the Financial Statements of foreign
operations where their functional currency is different to the presentation currency of the reporting entity, as well as from the translation of liabilities that
form part of the Group’s net investment in a foreign controlled entity.
20. Finance Lease and Hire Purchase Commitments
Qantas Group Qantas
2006
$M
2005
$M
2006
$M
2005
$M
Included in the Financial Statements as finance lease and hire purchase liabilities are the
present values of future rentals of the following:
Aircraft and engines 1,243.0 1,387.8 3,005.4 3,225.0
Computer and communications equipment 0.2 0.2––
1,243.2 1,388.0 3,005.4 3,225.0
Payable
Not later than one year 192.6 200.6 397.6 390.8
Later than one year but not later than five years 786.2 897.3 1,891.8 1,785.9
Later than five years 507.0 615.3 1,337.4 1,807.7
1,485.8 1,713.2 3,626.8 3,984.4
Less: future lease and hire purchase finance charges 242.6 325.2 621.4 759.4
1,243.2 1,388.0 3,005.4 3,225.0
Lease and hire purchase liabilities provided for in the Financial Statements
Current liability (refer Note 16) 134.7 83.8 265.2 197.1
Non-current liability (refer Note 16) 1,108.5 1,304.2 2,740.2 3,027.9
1,243.2 1,388.0 3,005.4 3,225.0
The Qantas Group leases aircraft, buildings and plant and equipment under finance leases with expiry dates between one and 18 years. Most finance leases
contain purchase options exercisable at the end of the lease term. The Qantas Group has the right to negotiate extensions on most leases.