Qantas 2013 Annual Report Download - page 112

110
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2013
With respect to operating lease agreements, where the
Qantas Group is required to return the aircraft with adherence
to certain maintenance conditions, provision is made during
the lease term. This provision is based on the present value
of the expected future cost of meeting the maintenance
return condition, having regard to the current eet plan and
long-term maintenance schedules. The present value of
non-maintenance return conditions is provided for at the
inception of the lease.
Manufacturers’ Credits
The Qantas Group receives credits from manufacturers in
connection with the acquisition of certain aircraft and engines.
These credits are recorded as a reduction to the cost of the
related aircraft and engines. Where the aircraft are held under
operating leases, the credits are deferred and reduced from the
operating lease rentals on a straight-line basis over the period
of the related lease as deferred credits.
Capital Projects
Capital projects are disclosed within the categories to which
they relate and are stated at cost. When the asset is ready for
its intended use, it is capitalised and depreciated.
Q INTANGIBLE ASSETS
Goodwill
All business combinations are accounted for by applying
the acquisition method. Goodwill represents the difference
between the cost of the acquisition and the fair value of the net
identiable assets acquired. Goodwill acquired before transition
to IFRS is carried at deemed cost.
Goodwill is stated at cost less any accumulated impairment
losses. Goodwill is allocated to CGUs and is tested annually
forimpairment.
With respect to associates and jointly controlled entities, the
carrying amount of goodwill is included in the carrying amount
of the investment in the associate or the jointly controlled entity.
Negative goodwill arising on an acquisition is recognised
directly in the Consolidated Income Statement.
Airport Landing Slots
Airport landing slots are stated at cost less any accumulated
i
mpairment losses. Airport landing slots are allocated
to therelevant CGU and are not amortised as they are
considered to have an indenite useful life and are tested
annually for impairment.
Software
Software is stated at cost less accumulated amortisation and
impairment losses. Software development expenditure, including
the cost of materials, direct labour and other direct costs, is only
recognised as an asset when the Qantas Group controls future
economic benets as a result of the costs incurred and it is
probable that those future economic benets will eventuate and
the costs can be measured reliably. Amortisation is charged to
the Consolidated Income Statement on a straight-line basis over
the estimated useful life of three to 10 years.
Brand Names and Trademarks
Brand names and trademarks are carried at cost less any
accumulated impairment losses. Brand names and trademarks
are allocated to the relevant CGU and are not amortised as they
are considered to have an indenite useful life and are tested
annually for impairment.
Customer Contracts/Relationships
Customer contracts/relationships are carried at their fair value
at the date of acquisition less accumulated amortisation and
impairment losses. Amortisation is calculated based on the
estimated timing of benets expected to be received from
those assets, which ranges from ve to 10 years.
R PAYABLES
Liabilities for trade creditors and other amounts payable are
carried at cost.
S EMPLOYEE BENEFITS
Wages, Salaries, Annual Leave and Sick Leave
Liabilities for wages, salaries, annual leave (including leave
loading) and sick leave vesting to employees are recognised in
respect of employees’ services up to the end of the reporting
period. These liabilities are measured at the amounts expected
to be paid when they are settled and include related on-costs,
such as workers compensation insurance, superannuation and
payroll tax.
Employee Share Plans
The fair value of equity-based entitlements settled in equity
instruments is recognised as an employee expense with a
corresponding increase in equity. The fair value is estimated
at grant date and recognised over the period during which
the employees become unconditionally entitled to the
equityinstrument.
The amount recognised as an expense is adjusted to reect the
actual number of entitlements that vest, except where forfeiture is
only due to share prices not achieving the threshold for vesting.
The fair value of equity-based entitlements settled in cash is
recognised as an employee expense and a corresponding
liability is recognised over the period that the employees
unconditionally become entitled to payment. The liability is
remeasured at each reporting date and at settlement date.
Any
changes in the fair value of the liability are recognised as
an employee expense in the Consolidated Income Statement.
Long Service Leave
The liability for long service leave is recognised as a provision
for employee benets and measured at the present value of
estimated future payments to be made in respect of services
provided by employees up to the end of the reporting period.
The provision is calculated using expected future increases in
wage and salary rates including related on-costs and expected
settlement dates based on staff turnover history. The provision
is discounted using the State Government Bonds rates which
most closely match the terms to maturity of the provision. The
unwinding of the discount is treated as a nance charge.
1. Statement of Signicant Accounting Policies
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ontinue
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