in this assignment i will send you the link of the company name and its annual report https://simsmetalmanagementlimited.gcs-web.com/static-files/94983c52-add1-483f-a503-11028895c60bfrom this annual...

FINANCIAL REPORT OF SIMS METAL MANAGEMENT LIMITED
1. As per the consolidated financial statement for the year ended 30th June 2017 the cu
ent provisions amount to $56.4 million and non-cu
ent provisions amount to $81.4 million totalling to $137.4 million for the year 2017. The bifurcation of the amount of provision is as follows:
· Employee benefits- $44.1 million
· Self-insured risks- $ 18.5 million
· Onerous lease provisions - $ 34.6 million
· Legal provisions - $18.0 million
· Property “make-good” - $20.2million
· Other provisions - $ 2.4 million
2. Recognition and measurement criteria relating the above mentioned provisions are mentioned in the following paragraphs:
The general rule of recognising the provisions is that the company recognises provisions only when it has a present obligation as a result of past event and it is likely that there would be an outflow of resources of the company.
Employee benefits: Provisions in this regard are likely to be settled within 12 months and are made for wages and salaries, leave salary and other obligations accruing to the employees at nominal value.
Self-insurance: Provisions in this regard are made in respect of the health insurance of the workers of the subsidiaries and are recognised on the basis of the claims reported on discounted value.
Onerous leases: Provisions in this regard are made when the company reasonably believes that the amount of lease obligation would exceed the amount of benefits from the lease.
Property “make-good”: Provisions in this respect are made for the environmental obligations and the liabilities in this regard which are going to be incu
ed and can be measured. However, other liabilities may also be incu
ed due to the changes in the laws and regulation which cannot be predicted in advance but will have a impact of the same.
Legal claims: Provisions in this regard are made for the amount of liabilities in respect of legal proceedings which are likely to be incu
ed and can be estimated reasonably. The legal proceedings in respect of estimates cannot be made cannot be recorded.
3. Employees benefit
Provisions in this regard are made for the benefits which the employees receive. Hence the company would know its obligation and also as the same would be settled within 12 months the company would know that its liability would arise shortly and would need liquidity in this respect. The amount of provision made is also the nominal amount of salary and wages and other benefits. By seeing this provision the amount of salary, wages and other employee benefits to be incu
ed be compared with the benefits incu
ed actually. Whereas the points against the making of provision are as follows:
A provision may be defined as a liability for which it is known that the obligation to pay or its occu
ence is certain but when the same will happen is uncertain. The provision will be made for the present obligation to pay for the past transaction and...