KU Financial Report
p) Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be
made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a
provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the
present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a
third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and
the amount of the receivable can be measured reliably.
q) Unearned income
The liability for unearned income is the unutilised amounts of grants received on the condition that specified
services are delivered or conditions are fulfilled. The services are usually provided or the conditions usually fulfilled
within 12 months of receipt of the grant. Where the amount received is in respect of services to be provided over
a period that exceeds 12 months after the reporting date or the conditions will only be satisfied more than 12
months after the reporting date, the liability is discounted and presented as non-current.
4. Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates
and associated assumptions are based on historical experience and other various factors that are believed to be
reasonable under the circumstances, the results of which form the basis of making the judgements. Actual results
may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the
revision and future periods if the revision affects both current and future periods.
The following are the critical judgements that management has made in the process of applying the Company’s
accounting policies and that have the most significant effect on the amounts recognised in the consolidated financial
statements:
4.1 Employee entitlements
Management judgement is applied in determining the following key assumptions used in the calculation of long
service leave at balance date:
• future increases in wages and salaries;
• future on-cost rates; and
• experience of employee departures and period of service including future years in which long service leave is
expected to be taken.
4.2 Leaseh