Current liability

Current liability represents the obligation to the company that is due to be met within one year, it usually tells a direct relationship to the operation activities of a business.

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Liability

Definition: Liabilities are debts or obligations of a company that result from past transactions, which will be satisfied by means of the outflow of economic resources or through the provision of services. There are two kinds of liabilities: current and non-current liabilities.

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AGL's deferred tax liabilities policy

The Parent Entity and its wholly owned Australian resident subsidiaries formed a tax consolidated group under Australian taxation law with effect from 25 October 2006 and are therefore taxed as a single entity from that date. AGL Energy Limited is the head entity in the tax consolidated group.

The members of the tax consolidated group have entered into a tax sharing and tax funding agreement. The tax funding agreement requires payments to/from the head entity equal to the current tax liability (asset) assumed by the head entity and any tax loss deferred tax asset assumed by the head entity. The payments are recorded as intercompany receivables/payables.

As a result of retrospective changes to the tax consolidation legislation enacted in June 2010, AGL has recognised a tax benefit of $85.5 million relating to tax deductions which are available for the tax value allocated to certain derivative assets in place at the time of the merger/demerger transaction with Alinta Limited in October 2006. These changes will result in a tax refund of $89.0 million and a deferred tax liability of $3.5 million. 

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AGL’s long-term borrowing policy

Significant terms and conditions

Bank loans are unsecured and are repayable on maturity in October 2011. Bank loans bear interest at the relevant interbank reference rate plus a margin. The consolidated entity has entered into interest rate swap contracts to manage the exposure to interest rates. This has resulted in a weighted average interest rate on bank loans of 5.8% (2009: 7.1%) Finance lease liabilities are secured over the assets leased.

Customer deposits relate to security deposits lodged with certain subsidiaries of the consolidated entity by gas and electricity customers. Deposits are normally held by the consolidated entity for periods of either one or two years. Other gas deposits are held until such time as the customers cease to be customers of the consolidated entity and all outstanding amounts are either paid or deducted from the security deposits.

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Accrued compensation and related costs

Salaries and wages:

employees earned salaries that have not yet been paid at the end of each accounting period.

Employee entitlements:

The collective term for benefit entitlements that employees accumulate as a result of the rendering of their services to an employer up to the reporting date. Employee entitlements consist of superannuation, annual leave and long service leave.

» Superannuation: is a certain percentage of employees’ total wages to fund their retirement.

» Annual leave: is paid leave that accrues to the employee for each year of service. 

» Long service leave: is the extended leave awarded to an employee after serving a number of years paid employment.

Three depreciation methods

Actuarial loss on defined benefit plans

Actuarial loss on defined benefit plans is the loss incurred from present value of the defined benefit obligation at the end of the reporting period less the fair value of the plan’s assets at that date and any unrecognized past service cost.

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