Note 6: People Costs continued Salaries and wages Salaries and wages include non-monetary benefits, annual leave, long service leave and termination benefits. These are recognised and presented in different ways in the financial statements: • The liability for annual leave, termination benefits and the portion of long-service leave expected to be settled within twelve months is measured at the amount expected to be paid and is included as a current provision. • The liability for long-service leave and other employee benefits, including termination benefits, expected to be settled after more than one year is measured as the present value of expected future payments and is included as a non-current provision. Defined benefit plans 2026 2025 US$m US$m Expenses recognised in the statement of comprehensive income are as follows: Current service cost 65 59 Net interest cost — 4 Past service (benefit)/cost (2) — Total defined benefit plan expense 63 63 Defined benefit pension plans provide either a defined lump sum or ongoing pension benefits for employees upon retirement, based on years of service and final average salary. Liabilities or assets in relation to these plans are recognised in the balance sheet, measured as the present value of the obligation less the fair value of the pension fund’s assets at that date. The present value of the obligation is based on the expected future payments required to settle the obligation at the reporting date and is calculated by independent actuaries using the projected unit credit method. Past service costs, including those arising from plan amendments or curtailments, are recognised net in the profit or loss at the earlier of the date of the plan amendment or curtailment and the date on which the Group recognises related restructuring costs. During the year ended 30 June 2026, a curtailment gain of $4m was recognised in connection with restructuring activities (Note 3) (2025: nil). Detailed information about the Group’s defined benefit plans is in Note 17(a). Key Judgements and Estimates The determination of certain employee benefit liabilities requires an estimation of future employee service periods and salary levels and the timing of benefit payments. These assessments are made based on past experience and anticipated future trends. The expected future payments are discounted using the rate applicable to high quality corporate bonds. Discount rates are matched to the expected payment dates of the liabilities. Defined contribution plans The Group makes contributions to various defined contribution pension plans and the Group’s obligation is limited to these contributions. The amount recognised as an expense for the year ended 30 June 2026 is $67m (2025: $62m). Equity settled share-based payment expense Share-based payment expenses arise from plans that award long-term incentives (LTI). Detailed information about the terms and conditions of the share-based payment arrangements is presented in Note 17(b). Outstanding share-based payment equity instruments The number and weighted average exercise price for each share-based payment plan outstanding is as follows. All plans are settled by physical delivery of shares at the time of vesting date except for instruments that may be settled in cash at the discretion of the Board. 107 CSL Limited Annual Report 2025/26
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