Note 13: Commitments and Contingencies (a) Capital Commitments Commitments in relation to capital expenditure contracted but not provided for in the financial statements are payable as follows: Capital Commitments 2022 US$m 2021 US$m Not later than one year 403.2 520.0 Later than one year but not later than five years 83.3 24.3 Total 486.5 544.3 The Company entered into a lease for a building, currently under construction in Melbourne, as the new global headquarters. The lease is expected to commence in 2023 with an initial term of 20 years and annual lease costs of approximately $15.0m. (b) Contingent assets and liabilities Litigation In the ordinary course of business, the Group is exposed to contingent liabilities related to litigation for breach of contract and other claims. Contingent liabilities occur when the possibility of a future settlement of economic benefits is considered to be less than probable but more likely than remote. If the expected settlement of the liability becomes probable, a provision is recognised. Other contingent assets and liabilities The Group has entered into collaboration arrangements, including in-licensing arrangements with various companies. Such collaboration agreements may require the Group to make payments on achievement of stages of development, launch or revenue milestones and may include variable payments that are based on unit sales (e.g. royalty payments). The amount of royalties payable under the arrangements are inherently uncertain and difficult to predict, given the direct link to future sales and the range of outcomes. The maximum amount of unrecognised potential future commitments for such payments associated with uniQure and Momenta licensing arrangements amount to $2,050.0m (2021: $2,105.0m). These amounts are undiscounted and are not risk-adjusted, which include all such possible payments that can arise assuming all products currently in development are successful and all possible performance objectives are met. CSL Limited Annual Report 2021/22 127
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