annual report 2011

IOOF | annual report 2011
Notes to the financial statements (cont’d)
For the year ended 30 June 2011
the carrying amount of any goodwill allocated to the units,
and then to reduce the carrying amounts of the other assets in
the unit (group of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In
respect of other assets, impairment losses recognised in prior
periods are assessed at each reporting date for any indications
that the loss has decreased or no longer exists. An impairment
loss is reversed if there has been a change in the estimates
used to determine the recoverable amount. An impairment
loss is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that would have
been determined, net of depreciation or amortisation, if no
impairment loss had been recognised.
Goodwill that forms part of the carrying amount of an
investment in an associate is not recognised separately, and
therefore is not tested for impairment separately. Instead, the
entire amount of the investment in an associate is tested for
impairment as a single asset when there is objective evidence
that the investment in an associate may be impaired.
(i)
(i)
Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan
under which an entity pays fixed contributions into a separate
entity and will have no legal or constructive obligation to pay
further amounts. Obligations for contributions to defined
contribution plans are recognised in profit or loss in the
periods during which services are rendered by employees.
Prepaid contributions are recognised as an asset to the
extent that a cash refund or a reduction in future payments is
available.
(ii)
Retirement benefit obligations
Employees of the Group are entitled to benefits from the
Group’s superannuation plan on retirement, disability or
death; subject to qualification for membership of the plan.
This plan is a defined contribution scheme that receives fixed
contributions from Group companies. The Group’s legal or
constructive obligation is limited to these contributions.
Employees are entitled to nominate external superannuation
plans to which fixed contributions are similarly directed.
Contributions to defined contribution superannuation plans
are recognised as an expense in profit or loss when incurred.
(iii) Other long-term employee benefits
The Group’s net obligation in respect of long-term employee
benefits is the amount of future benefit that employees have
earned in return for their service in the current and prior
periods plus related on-costs.
Liabilities for long-term benefits that are expected to be
settled beyond 12 months are discounted using rates
attaching to Commonwealth Government securities which
most closely match the terms of maturity of the related
liabilities at balance date.
In determining the liability for employee entitlements,
consideration is given to future increases in wage and salary
rates, experience with employee departures and periods of
service.
(iv) Termination payments and redundancy costs
Termination benefits or redundancy costs are recognised as an
expense when the Group is committed demonstrably, without
realistic opportunity of withdrawal, to a formal detailed plan
without possibility of withdrawal, or providing termination
benefits as a result of an offer made to encourage voluntary
redundancy.
(v) Short-term employee benefits
Short-term employee benefit obligations are measured on an
undiscounted basis and are expensed as the related service is
provided.
A liability is recognised for the amount expected to be paid
under short-term cash bonus or profit-sharing plans if the
Group has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee
and the obligation can be estimated reliably.
(vi) Short-term incentive plans
A provision for employee benefits in the form of an incentive
plan is recognised when there is no realistic alternative but to
settle the liability, and at least one of the following conditions
is met:
• there are formal terms in the plan for determining the
amount of the benefit;
• the amounts to be paid are determined before the time of
completion of the financial report; or
• past practice gives clear evidence of the amount of the
obligation.
Liabilities for incentives are expected to be settled within 12
months and are measured at the amounts expected to be paid
when they are settled.
(vii) Share-based payment transactions
The grant-date fair value of share-based payment awards
granted to employees is recognised as a share-based payment
expense, with a corresponding increase in the share-based
payments reserve, over the period that the employees
unconditionally become entitled to the awards. The amount
recognised as an expense is adjusted to reflect the number of
page 60