Axiom 2014 Annual Report - page 96

Notes to the Financial Statements
for the year ended 30 September 2014
Axiom Mining Limited
4. Summary of significant accounting
policies (continued)
Employee benefits
Salaries, annual bonuses, paid annual leave,
contributions to defined contribution retirement plans
and the cost of non-monetary benefits are accrued in
the year in which the associated services are rendered
by employees. Where payment or settlement is defined
and the effect would be material, these amounts are
stated at their present values. Superannuation is paid in
accordance with applicable local government legislation.
Short-term employee benefits
Provision is made for the Group’s obligation for short-
term employee benefits. Short-term employee benefits
are benefits (other than termination benefits) that are
expected to be settled wholly before 12 months after
the end of the annual reporting period in which the
employees render the related service, including wages,
salaries and sick leave. Short-term employee benefits are
measured at the (undiscounted) amounts expected to be
paid when the obligation is settled.
The Group’s obligations for short-term employee benefits
such as wages, salaries and sick leave are recognised
as a part of current trade and other payables in the
statement of financial position. The Group’s obligations
for employees’ annual leave and long service leave
entitlements are recognised as provisions in the
statement of financial position.
Other long-term employee benefits
Provision is made for employees’ long service leave and
annual leave entitlements not expected to be settled
wholly within 12 months after the end of the annual
reporting period in which the employees render the
related service. Other long-term employee benefits
are measured at the present value of the expected
future payments to be made to employees. Expected
future payments incorporate anticipated future wage
and salary levels, durations of service and employee
departures and are discounted at rates determined by
reference to market yields at the end of the reporting
period on government bonds that have maturity dates
that approximate the terms of the obligations. Any
re-measurements for changes in assumptions of
obligations for other long-term employee benefits
are recognised in profit or loss in the periods in
which the changes occur.
The Group’s obligations for long-term employee benefits
are presented as non-current provisions in its statement
of financial position, except where the Group does not
have an unconditional right to defer settlement for at
least 12 months after the end of the reporting period,
in which case the obligations are presented as current
Share-based payments
The fair value of share options granted to employees is
recognised as an employee cost with a corresponding
increase in a reserve within equity. The fair value of
shares granted to service providers is recognised as
an expense. The fair value is measured at grant date
using the binomial lattice model, taking into accounts
the terms and conditions upon which the options were
granted. Where the employees have to meet vesting
conditions before becoming unconditionally entitled to
the options, the total estimated fair value of the options
is spread over the vesting period, taking into account the
probability that the options will vest.
During the vesting period, the number of share options
that is expected to vest is reviewed. Any adjustment
to the cumulative fair value recognised in prior years
is charged or credited to the profit or loss for the year
of the review, unless the original employee expenses
qualify for recognition as an asset, with a corresponding
adjustment to the reserve. On vesting date, the amount
recognised as an expense is adjusted to reflect the
actual number of options that vest (with a corresponding
adjustment to the reserve) except where forfeiture is
only due to not achieving vesting conditions that relate
to the market price of the Company’s shares. The equity
amount is recognised in the reserve until either the
option is exercised (when it is transferred to the share
premium account) or the option expires (when released
to accumulated losses).
Goods and services tax (GST)
Revenue, expenses and assets are recognised net of the
amount of goods and services tax (GST), except where
the amount of GST incurred is not recoverable from the
taxation authority. In these circumstances, the GST is
recognised as part of the cost of acquisition of the asset
or as part of the expenses. Receivables and payables are
stated with the amount of GST included. The net amount
of GST recoverable from, or payable to, the taxation
authority is included as a current asset or liability in the
balance sheet.
Cash flows are included in the cash flow statement
on a gross basis. The GST components of cash flows
arising from investing and financing activities that are
recoverable from, or payable to, the taxation authority
are classified as operating cash flows.
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