It is the amount that is not predictable to get established within the time span of 12 months. It is the current portion of the Long Service Leaves provisions that depicts the amount where the company does not have any of the unconditional right for deferring against the settlement for time span 12 months after the exposure date where the employees have finished or served the required service time period as well as also certain situations where the employees are permitted for getting the pro-rate expenditure. Furthermore, it is based on the past understanding where the group does not anticipate the entire workforce take the full amount of accrual long service leave nor need payment within the time span of 12 months (Guthrie and Pang 2013).
Below is the amount that reflects on the leave that is not predictable to be taken or paid within the next 12 months.
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Flight Centre Travel Group
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2015 ($’000)
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2016 ($’000)
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Long Service Leave obligations expected to be settled after 12 months
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21,475
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25,634
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The liability of the long service that is not predictable to be developed within 12 months after the end of the time period where the staff gets interrelated services that is mentioned in the provisions. It is the main reason why divisions remain unrecognized as a provision. Furthermore, the liabilities depict the current value of predictable future payments that is made to the services where staff provides up to the end of the coverage period. Flight Centre Travel Group considers predictable future wage as well as salary levels where knowledge of worker departures with the period of service. Therefore, the predictable future payments are present in according to the end of the reporting period where the discounting is used by the market yields on national corporate bonds based on the maturity and prevalence that matches with the estimated future cash outflows.
References
Bond, D., Govendir, B. and Wells, P., 2016. An evaluation of asset impairments by Australian firms and whether they were impacted by AASB 136. Accounting & Finance.
Flight Centre Travel Group Limited. 2017. Flight Centre Travel Group Limited. Retrieved 20 May 2017, from https://www.fctgl.com
Guthrie, J. and Pang, T.T., 2013. Disclosure of Goodwill Impairment under AASB 136 from 2005–2010. Australian Accounting Review, 23(3), pp.216-231.
Hanlon, D., Navissi, F. and Soepriyanto, G., 2014. The value relevance of deferred tax attributed to asset revaluations. Journal of Contemporary Accounting & Economics, 10(2), pp.87-99.
Hu, F., Percy, M. and Yao, D., 2015. Asset revaluations and earnings management: Evidence from Australian companies. Corporate Ownership and Control, 13(1), pp.930-939.
Laing, G.K. and Perrin, R.W., 2014. Deconstructing an accounting paradigm shift: AASB 116 non-current asset measurement models. International Journal of Critical Accounting, 6(5-6), pp.509-519.
Yao, D.F.T., Percy, M. and Hu, F., 2015. Fair value accounting for non-current assets and audit fees: Evidence from Australian companies. Journal of Contemporary Accounting & Economics, 11(1), pp.31-45.
Zhuang, Z., 2016. Discussion of ‘An evaluation of asset impairments by Australian firms and whether they were impacted by AASB 136’. Accounting & Finance, 56(1), pp.289-294.
