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CIMIC Group Limited Annual Report 2016 |
Financial Report
Notes to the Consolidated Financial Statements continued
for the 12 months to 31 December 2016
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CONTINUED
n) Employee benefits
continued
Share-based payment transactions
Ownership based remuneration is provided to employees via the plans outlined in Note 36:
Employee Benefits
. The fair value of share
options and share rights are recognised as an expense over the vesting period.
Shares are recognised when either options are exercised and the proceeds received or shares are issued to settle share rights.
Retention arrangements
Retention arrangements are in place ranging from three years to retirement for certain key employees which are payable upon completion
of the retention period.
The provisions are accrued on a pro-rata basis during the retention period and have been calculated based on salary rates, including related
on-costs.
Annual bonus and deferred incentive arrangements
Annual bonuses and deferred incentives are provided at reporting date and include related on-costs. The Group recognises a provision
where there is a contractual or constructive obligation.
o) Share capital
Ordinary share capital
Issued and paid up capital is recognised at its par value, being the consideration received by the Company.
Dividends
Provision is not made for dividends unless the dividend has been declared by the Directors, but not distributed, at or before the end of the
period.
p) Foreign currency translation
Functional and presentation currency
The consolidated financial statements are presented in Australian dollars.
Transactions
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions are recognised in the
statement of profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate as at the date of the initial transaction.
Non-monetary items measured at fair value are translated using the exchange rates at the date when the fair value was determined.
Translation of controlled foreign entities
Assets and liabilities of controlled foreign entities are translated into the presentation currency at the rates of exchange at reporting date
and the statement of profit or loss is translated at the rates approximating foreign exchange rates ruling at the dates of the transactions.
The resulting exchange differences are taken directly to the foreign currency translation reserve. Exchange gains and losses on transactions
which form part of the net investments in foreign controlled entities together with any related income tax effect are recognised in the
foreign currency translation reserve on consolidation. On disposal of a foreign entity, the deferred cumulative amount recognised in equity
relating to that particular foreign entity is recognised in the statement of profit or loss as part of the gain or loss on sale.
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