Annual Report 2011 Australian Grand Prix Corporation

Notes to and Forming Part of the Financial Statementsfor the Financial Year Ended 30 June 2011Long Service LeaveLiability for long service leave (LSL) is recognised in the provision for employee benefits.Unconditional LSL is disclosed in the notes to the financial statements as a current liability even wherethe corporation does not expect to settle the liability within 12 months because it will not have theunconditional right to defer the settlement should an employee take leave within 12 months.The components of this current LSL liability are measured at:- Nominal value – component that the Corporation expects to settle within 12 months- Present value – component that the Corporation does not expect to settle within 12 monthsConditional LSL is disclosed as a non-current liability. There is an unconditional right to defer thesettlement of the entitlement until the employee has completed the requisite years of service.The non-current liability is measured at present value. Any gain or loss following revaluation of thepresent value of the non-current LSL liability is recognised as a transaction, except to the extent thata gain or loss arises due to changes in bond interest rates, for which it is then recognised as an ‘othereconomic flow’.(refer note 1 (j))Employee benefits on-costsEmployee benefits on-costs such as payroll tax, workers compensation and superannuation arerecognised separately from the provision for employee benefits.(o) LeasesA lease is a right to use an asset for an agreed period of time in exchange for payment.Leases are classified at their inception as either operating or finance leases based on the economicsubstance of the agreement so as to reflect the risks and rewards incidental to ownership. Leasesof property, plant and equipment are classified as finance leases whenever the terms of the leasetransfer substantially all the risks and rewards of ownership to the lessee. All other leases are classifiedas operating leases.Operating LeaseOperating lease payments are recognised as an expense in the comprehensive operatingstatement on a straight line basis over the lease term, except where another systematic basis is morerepresentative of the time pattern of the benefits derived from the use of the asset. The leased assetis not recognised in the balance sheet.The cost of leasehold improvements is capitalised as an asset and depreciated over the remainingterm of the lease or the estimated useful life of the improvements, whichever is the shorter.Australian Grand Prix Corporation Annual Report 2011 41