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Note 6. Provisions

2020
$

2019
$

Employee

Annual leave

639,794

414,453

Long service leave

485,248

369,850

Total employee provisions

1,125,042

784,303

Employee provisions expected to be settled in:

No more than 12 months

998,947

630,194

More than 12 months

126,095

154,109

Total employee provisions

1,125,042

784,303

Other

Provision for make good

361,892

367,760

Total other provisions

361,892

367,760

AITSL currently has an agreement for the leasing of premises at 440 Collins Street, Melbourne. The lease has a clause requiring AITSL to restore the premises to its original condition at the conclusion of the lease. A provision has been made to reflect the present value of this obligation which is expected to be settled in more than 12 months.

Make good

2020
$

2019
$

Movements in the other provisions

Opening balance

367,760

344,346

Borrowing cost adjustment

12,948

12,478

Present value adjustment

(18,816)

10,936

Amortisation of provision

-

-

Balance at 30 June

361,892

367,760

Accounting Policy

Provisions

A provision is recognised if, as a result of a past event, AITSL has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as a finance cost.

Employee provisions and benefits

Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave for services rendered to the reporting date. Provision for ‘short-term employee benefits’ (as defined in AASB 119 Employee Benefits) and termination benefits due within twelve months of the end of reporting period are measured at their nominal amounts.

Leave

The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for personal or carer leave as all personal and carer leave is non-vesting and the average personal and carer leave taken in future years by employees of the entity is estimated to be less than the annual entitlement.

Long service leave liabilities that are not expected to be settled within 12 months are recognised in the provision for employee benefits as non-current liabilities and are measured at present value of the amounts expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement.

Superannuation

Contributions are made by AITSL to employee superannuation funds and are charged as expenses when incurred. AITSL makes contributions to the funds in accordance with the superannuation guarantee legislation.