Presentation of employee entitlements Commitments Accrued salaries and wages, bonuses, annual leave and vested long service leave are classified as a current liability. Non-vested long service leave and retirement leave expected to be settled within 12 months of balance date are classified as a current liability. All other employee entitlements are classified as a non-current liability. Expenses yet to be incurred on non-cancellable operating leases that have been entered into on or before balance date are disclosed as commitments to the extent that there are equally unperformed obligations. Superannuation schemes Defined contribution schemes Obligations for contributions to KiwiSaver and the Government Superannuation Fund are accounted for as defined contribution schemes and are recognised as an expense in the surplus or deficit in the statement of comprehensive revenue and expense as incurred. Defined benefit schemes The Commission currently does not make contributions to defined benefit schemes. Provisions A provision is recognised for future expenditure of an uncertain amount or timing when there is a present obligation (either legal or constructive) as a result of a past event, it is probable that an outflow of future economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the present value of the expenditure expected to be required to settle the obligation using a discount rate that reflects current market assessments of the time, value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as an interest expense and is included in finance costs. Organisational change costs A provision for organisational change costs arising from restructuring is recognised when an approved detailed formal plan for the restructuring has either been announced publicly to those affected, or for which implementation has already commenced. Annual Report 2015 Cancellable operating leases that have penalty or exit costs explicit in the agreement on exercising that option to cancel are disclosed at the value of that penalty or exit cost. Accumulated funds Accumulated funds are the net surpluses and deficits that have accumulated over time and represent the Crown’s investment in the Commission. Accumulated funds are measured as the difference between total assets and total liabilities. Goods and services tax (GST) All items in the financial statements are stated exclusive of GST, except for receivables and payables, which are stated on a GST inclusive basis. Where GST is not recoverable as input tax it is recognised as part of the related asset or expense. The net amount of GST recoverable from, or payable to, the Inland Revenue Department (IRD) is presented in the statement of financial position. The net GST paid to, or received from the IRD, including the GST relating to investing and financing activities, is classified as an operating cash flow in the statement of cash flows. Commitments and contingencies are disclosed exclusive of GST. Income tax The Commission is a public authority and consequently is exempt from the payment of income tax. Accordingly, no provision has been made for income tax. 47