Parks Victoria - Annual Report 2009-10

FINANCIAL REPORTNOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 30 June 20102.10 Liabilities(i) PayablesPayables are recognised when Parks Victoria becomes obliged to make future payments resulting fromgoods and services provided prior to the end of the financial year, which are unpaid at financial year end.Payables are non–interest bearing and have an average credit period of 30 days.(ii) Employee Benefits(a) Wages and Salaries and Sick LeaveLiabilities for wages and salaries, including non-monetary benefits, that are expected to be settledwithin 12 months of the reporting date, are measured at their nominal amounts in respect of employees’services up to the reporting date. The nominal basis of measurement uses employee remuneration ratesthat the entity expects to pay as at each reporting date and does not discount cash flows to their presentvalue. Non–vesting sick leave is not expected to exceed current and future sick leave entitlements, andaccordingly, no liability has been recognised.(b) Annual Leave and Long Service LeaveAnnual leave and long service leave entitlements expected to be settled within 12 months of thereporting date are recognised as a provision for employee benefits in the Balance Sheet at their nominalvalues.Annual leave and long service leave entitlements not expected to be settled within 12 months of thereporting date are recognised at the present value of the estimated future cash outflows to be madeby Parks Victoria in respect of services provided by employees up to reporting date. Consideration isgiven to expected future employee remuneration rates, employment related on-costs and other factorsincluding experience of employee departures and periods of service. In the determinaton of the longservice leave entitlement liabilities, Parks Victoria use the wage inflation and discount rates released bythe Department of Treasury and Finance.(c) Classification of Employee Benefits as Current and Non–Current LiabilitiesEmployee benefit provisions are reported as current liabilities where Parks Victoria does not have anunconditional right to defer settlement for at least 12 months. Consequently, the current portion of theemployee benefit provision can include both short–term benefits (those benefits expected to be settledwithin 12 months of the reporting date), that are measured at nominal values, and long-term benefits(those benefits not expected to be settled within 12 months of the reporting date), that are measured atpresent values.Employee benefit provisions that are reported as non-current liabilities also include long-term benefitssuch as non vested long service leave (i.e. where the employee does not have a present entitlement tothe benefit) that do not qualify for recognition as a current liability, and are measured at present vales.The non-current liability for long service leave represents entitlements accrued for employees with lessthan 7 years of continuous service.66 Parks Victoria - Annual Report 2009-10