Notes to the financial statements (continued) Section 3: Operational assets and liabilities (continued) 14. Provisions (continued)
An independent actuarial valuation is carried out at each reporting date. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in the reporting years in which they occur, directly in other comprehensive income. ii. Rehabilitation costs A provision for site rehabilitation costs is recognised when: • there is either a legal or constructive obligation to rehabilitate a site as a result of a past event • it is probable a rehabilitation expense will be incurred to settle the obligation • the obligation costs can be reliably estimated. The amount of the provision, being the estimated present value of the future rehabilitation costs, is capitalised into the cost of the related property, plant and equipment, and depreciated over the estimated useful life. Any subsequent changes in the estimated future costs, useful lives and/or the discount rates are added to or deducted from the cost of the related property, plant and equipment. Rehabilitation costs that relate to an existing condition caused by past operations, but that do not have a future economic benefit are expensed to profit or loss in the reporting years in which they are incurred.
A. Accounting policy (continued) i. Employee benefits (continued) Retirement benefit obligations
All employees of Western Power are entitled to benefits upon retirement, disability or death from any number of superannuation plans, which may include a defined contribution section, a defined benefit section, or both. The liabilities for retirement benefit obligations are recognised in the ‘Provision for employee benefits – other’. Defined contribution plans A defined contribution plan is a post-employment benefit plan under which Western Power pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Contributions to defined contribution plans are recognised as an expense in the reporting years in which the services are rendered by employees (refer to note 5(a)). Defined benefit plans The net liability or asset for defined benefit plans is recognised in the statement of financial position, and is measured separately for each plan at the present value of the defined benefit obligation in respect of services provided by employees up to the reporting date, less the fair value of any plan assets. The present value is based upon expected future payments and is calculated using discounted cash flows consistent with the projected unit credit method. Consideration is given to factors including the expected future wages and salaries level, experience of employee departures and periods of service. Expected future payments are discounted using the Commonwealth bond rates whose terms most closely match the terms of the related liabilities. The annual net defined benefit interest cost is determined by applying the discount rate to the net defined benefit liability or asset. It is recognised immediately along with all other defined benefit plan expenses including past services costs, in ‘Employee related expenses’ in profit or loss.
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Western Power Annual Report 2025
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