Telstra 2007 Annual Report Download - page 176

Telstra Corporation Limited and controlled entities
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Notes to the Financial Statements (continued)
(c) Informat ion about our provisions, other than provision for
employee benefits
Workers’ compensation
We self insure for our workers’ compensation liabilities. We provide
for our obligations through an assessment of accident s and estimated
claims incurred. The provision is based on a semi-annual actuarial
review of our workers’ compensation liability. Actual compensation
paid may vary where accidents and claims incurred vary from those
estimated. The timing of these payments may vary, however the
average time payments are expected for is 9 years (2006: 11 years).
Cert ain controlled entities do not self insure, but pay annual
premiums to third party insurance companies for their workers’
compensation.
Restructuring and redundancy
The provision for restructuring and redundancy relates to our
transformation project that was announced on 15 November 2005. A
provision exists only for those restructuring and redundancy costs
where a detailed formal plan has been approved and we have raised a
valid expectation in those affected that the plan will be carried out.
Only those costs that are not associated with the ongoing activities of
the Company have been included. The costs included in the
restructuring and redundancy provision are based on current
estimates of the likely amounts to be incurred and include:
• an est imate of the termination benefits that affected employees
will be entitled to;
• costs associated with shutting down certain networks, platforms
and applications;
• propert y rat ionalisation and other onerous lease costs; and
• costs of replacing customer equipment in order to meet our current
service obligations.
The execution of these detailed formal plans, for which a restructuring
and redundancy provision has been raised, is expected to be
completed by fiscal 2011 for the restructuring provision, and fiscal
2008 for the redundancy provision.
Other
Other provisions include provision for Reach Ltd’s committed capital
expenditure, provision for restoration costs, provision for surplus
lease space, provision for lease incentives, provision for onerous
leases and other general provisions.
19. Provisions (continued)