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CORDLIFE GROUP LIMITED
| ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
2.20 Employee benefits
(Continued)
(b)
Employee leave entitlement
Employee entitlements to annual leave are recognised as a liability when they accrue to
employees. The estimated liability for leave is recognised for services rendered by employees
up to the reporting date.
(c)
Employee equity compensation plans
Employees (including senior executives) of the Group receive remuneration in the form of share
awards as consideration for services rendered. The cost of these equity-settled share-based
transactions with employees is measured by reference to the fair value of the awards at the date
on which the awards are granted which takes into account market conditions and non-vesting
conditions. This cost is recognised in profit or loss, with a corresponding increase in the share-
based compensation reserve, over the vesting period. The cumulative expense recognised at
each reporting date until the vesting date reflects the extent to which the vesting period has
expired and the Group’s best estimate of the number of awards that will ultimately vest. The
charge or credit to profit or loss for a period represents the movement in cumulative expense
recognised as at the beginning and end of that period and is recognised in employee benefits
expense.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting
is conditional upon a market or non-vesting condition, which are treated as vested irrespective
of whether or not the market condition or non-vesting condition is satisfied, provided that all
other performance and/or service conditions are satisfied. In the case where the award does
not vest as the result of a failure to meet a non-vesting condition that is within the control of
the Group or the employee, it is accounted for as a cancellation. In such case, the amount of
the compensation cost that otherwise would be recognised over the remainder of the vesting
period is recognised immediately in profit or loss upon cancellation.
2.21 Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of the
arrangement at inception date: whether fulfilment of the arrangement is dependent on the use of a
specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not
explicitly specified in an arrangement.
As lessee
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to
ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased
asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also
added to the amount capitalised. Lease payments are apportioned between the finance charges and
reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance
of the liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged as
expenses in the periods in which they are incurred.
