Parks Victoria - Annual Report 2009-10

NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 30 June 20102.10 Liabilities (continued)(ii) Employee Benefits (continued)(d) Performance PaymentsPerformance payments for Parks Victoria’s Executive Officers are based on a percentage of the annualsalary package provided under their contracts of employment. A liability is recognised and is measuredas the aggregate of the amounts accrued under the terms of the contracts at balance date. Since theperformance payments earned are paid upon completion of annual performance reviews, the totalamount is classified as a current liability.(e) SuperannuationContributions are made by Parks Victoria to employee superannuation funds and are charged as expenseswhen incurred.Disclosure of superannuation contributions by Parks Victoria is provided in Note 29.(iii) ProvisionsProvisions are recognised when Parks Victoria has a present obligation, the future sacrifice of economicbenefits is probable, and the amount of the provision can be measured reliably.The amount recognised as a provision is the best estimate of the consideration required to settle thepresent obligation at reporting date, taking into account the risks and uncertainties surrounding theobligation. Where a provision is measured using the cashflows estimated to settle the present obligation,its carrying amount is the present value of those cashflows.When some or all of the economic benefits required to settle a provision are expected to be recognisedfrom a third party, the receivable is recognised as an asset if it is virtually certain that recovery will bereceived and the amount of the receivable can be measured reliably.(iv) Deferred RevenueDeferred revenues represents the portion of reciprocal government and external grants/funding which atend of financial year has not yet been performed (see Note 2.13).2.11 Provision for DismantlingWhen an asset is initially recognised, AASB 116 Property, Plant and Equipment requires the capitalisationof costs of dismantling and removing an asset and restoring the site on which the asset was created,together with the recognition of this provision determined at present value in accordance with AASB137 Provisions, Contingent Liabilities and Contingent Assets. As a consequence, there is an increase indepreciation expense as a result of the increase in the carrying amounts of assets and also an interestexpense would be incurred as the present value discount on the dismantling unwinds.Parks Victoria - Annual Report 2009-10 67