legal or constructive obligation as a result of 
past events, it is probable that an outflow of 
resources will be required to settle the obliga-
tion and the amount has been reliably esti-
mated. Provisions are not recognised for future 
operating losses.
Where there are a number of similar obligations, 
the likelihood that an outflow will be required in 
settlement is determined by considering the 
class of obligations as a whole. A provision is 
recognised even if the likelihood of an outflow 
with respect to any one item included in the 
same class of obligations may be small. 
Provisions are measured at the present value of 
management’s best estimate of the expenditure 
required to settle the present obligation at the 
reporting date. The discount rate used to deter-
mine the present value reflects current market 
assessments of the time value of money and the 
risks specific to the liability. The increase in the 
provision due to the passage of time is recog-
nised as finance costs.
v .   Restoration and  
rehabilitation provision
The estimated costs of decommissioning and 
removing an asset and restoring the site are 
included in the cost of the asset as at the date 
the obligation first arises and to the extent that 
it is first recognised as a provision. This restora-
tion asset is subsequently amortised on a units-
of-production basis.
The corresponding provision, of an amount 
equivalent to the restoration asset created, is 
reviewed at the end of each reporting period. 
The provision is measured at the best estimate 
of the present value amount required to settle 
the present obligation at the end of the 
reporting period based on current legal and 
other requirements and technology, discounted 
where material using national government bond 
rates at the reporting date with terms to matu-
rity and currencies that match, as closely as 
possible, the estimated future cash outflows.
Where there is a change in the expected restora-
tion, rehabilitation or decommissioning costs, 
an adjustment is recorded against the carrying 
value of the provision and any related restora-
tion asset, and the effects are recognised in the 
statement of comprehensive income on a 
prospective basis over the remaining life of the 
operation. 
The unwinding of the effect of discounting on 
the rehabilitation provision is included within 
finance costs in the statement of comprehen-
sive income.
Costs incurred that relate to an existing condi-
tion caused by past operations, but do not have 
a future economic benefit are expensed as 
incurred.
w . Employee benefits
(i)  Wages and salaries, annual leave  
and sick leave
Liabilities for wages and salaries, including 
non-monetary benefits and annual leave 
expected to be settled within 12 months of the 
reporting date are recognised in provisions for 
employee benefits in respect of employees’ 
services up to the reporting date and are meas-
ured at the amounts expected to be paid when 
the liabilities are settled. Liabilities for sick leave 
are recognised when the leave is taken and are 
measured at the rates paid or payable.
(ii) Long service leave and severance pay 
The liability for long service leave and severance 
pay is recognised in the provision for employee 
benefits and measured as the present value of 
expected future payments to be made in respect 
of services provided by employees up to the 
reporting date. Consideration is given to the 
expected future wage and salary levels, experi-
ence of employee departures and periods of 
service. Expected future payments are 
discounted using market yields at the reporting 
date on national government bonds with terms