Home' Slater and Gordon Annual Report : Slater and Gordon AR 2015 Contents 78
Annual Report 2015
Slater and Gordon Limited
Notes to the Financial Statements
For the Year Ended 30 June 2015
Slater and Gordon Limited
Note 1: Statement of Significant Accounting Policies (continued)
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of past events, for
which it is probable that an outflow of economic benefits will result in an amount that can be reliably measured.
A provision for solicitor liability claims is made for the potential future cost of claims brought against the Group by former
clients. The provision is determined by including the estimated maximum amount payable by the Group under its
Professional Indemnity Insurance Policy on all claims notified to its insurer.
(n) Employee Benefits
Short-term employee benefit obligations
Liabilities arising in respect of wages and salaries, annual leave and any other employee benefits expected to be settled
within twelve months of the reporting date are measured at the amounts based on remuneration rates which are
expected to be paid when the liability is settled. The expected cost of short-term employee benefits in the form of
compensated absences such as annual leave and accumulated sick leave is recognised in the provision for employee
benefits. All other short-term employee benefit obligations are presented as payables.
Long-term employee benefit obligations
The provision for employee benefits in respect of long service leave and annual leave payable later than one year have
been measured at the present value of the estimated future cash outflows to be made for those benefits. These
estimated future cash flows have been discounted using market yields, at the reporting date, on corporate bonds with
matching terms to maturity.
Employee benefit obligations are presented as current liabilities in the consolidated statement of financial position if the
entity does not have an unconditional right to defer settlement for at least twelve months after the reporting date,
regardless of when the actual settlement is expected to occur.
Defined contribution superannuation plan
The Group makes contributions to defined contribution superannuation plans in respect of employee services rendered
during the year. These superannuation contributions are recognised as an expense in the same period when the
employee services are received.
The Group recognises a provision when a bonus is payable in accordance with the employee’s contract of employment
and the amount can be reliably measured.
Termination benefits are payable when employment of an employee or group of employees is terminated before the
normal retirement date, or when the entity provides termination benefits as a result of an offer made and accepted in
order to encourage voluntary redundancy.
The Group recognises a provision for termination benefits when the entity can no longer withdraw the offer of those
benefits, or if earlier, when the termination benefits are included in a formal restructuring plan that has been announced
to those affected by it. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they
are discounted and presented as non-current liabilities.
(o) Share-based payment transactions
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value
of the equity instruments at the grant date.
The consolidated entity operates share-based payment employee share and option schemes. The fair value of the equity
to which employees become entitled is measured at grant date and recognised as an expense over the vesting period,
with a corresponding increase to an equity account. Details regarding the determination of the fair value of equity-settled
share-based transactions are set out in Note 27. In respect of share-based payments that are dependent on the
satisfaction of performance conditions, the number of shares and options expected to vest is reviewed and adjusted at
each reporting date. The amount recognised for services received as consideration for these equity instruments granted
is adjusted to reflect the best estimate of the number of equity instruments that eventually vest.
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