Employee benefits, restructuring and post-retirement employee benefits provisions

12 Months Ended

Jun. 30, 2021

Employee benefits, restructuring and post-retirement employee benefits provisions

26 Employee benefits, restructuring and post-retirement employee benefits provisions


	2021		2020
	US$M		US$M
Employee benefits (1)		1,624		1,313
Restructuring (2)		54		34
Post-retirement employee benefits (3)		534		547

Total provisions		2,212		1,894

Comprising:
Current		1,606		1,283
Non-current		606		611


2021 US$M	Employee benefits			Restructuring			Post- retirement employee benefits (3)			Total
At the beginning of the financial year		1,313			34			547			1,894
Charge/(credit) for the year:
Underlying		1,402			45			62			1,509
Discounting		–			–			31			31
Net interest expense		–			–			(10	)		(10	)
Exchange variations		104			1			30			135
Released during the year		(82	)		–			(46	)		(128	)
Remeasurement gains taken to retained earning s		–			–			(58	)		(58	)
Utilisation		(1,119	)		(26	)		(59	)		(1,204	)
Transfers and other movements		6			–			37			43

At the end of the financial year		1,624			54			534			2,212

(1)	The expenditure associated with total employee benefits will occur in a pattern consistent with when employees choose to exercise their entitlement to benefits.

(2)	Total restructuring provisions include provisions for terminations and office closures.

(3)	Refer to note 27 ‘Pension and other post-retirement obligations’.

Recognition and measurement

Provisions are recognised by the Group when:

•

there is a present legal or constructive obligation as a result of past events

•

it is more likely than not that a permanent outflow of resources will be required to settle the obligation

•

the amount can be reliably estimated and measured at the present value of management’s best estimate of the cash outflow required to settle the obligation at reporting date


Provision		Description
Employee benefits		Liabilities for annual leave and any accumulating sick leave accrued up until the reporting date that are expected to be settled within 12 months are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for long service leave are measured as the present value of estimated future payments for the services provided by employees up to the reporting date and disclosed within employee benefits. Liabilities that are not expected to be settled within 12 months are discounted at the reporting date using market yields of high-quality corporate bonds or government bonds for countries where there is no deep market for corporate bonds. The rates used reflect the terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. In relation to industry-based long service leave funds, the Group’s liability, including obligations for funding shortfalls, is determined after deducting the fair value of dedicated assets of such funds. Liabilities for unpaid wages and salaries are recognised in other creditors.

Restructuring		Restructuring provisions are recognised when: • the Group has a detailed formal plan identifying the business or part of the business concerned, the location and approximate number of employees affected, a detailed estimate of the associated costs, and an appropriate timeline • the restructuring has either commenced or been publicly announced and can no longer be withdrawn Payments falling due greater than 12 months after the reporting date are discounted to present value.