70 Consolidated  Notes to the  Financial  Statements Note 1 – Summary of significant accounting policies  (continued) (x) Employee benefi ts (z) Provisions (y) Share-based payments Restructuring Borrowings are classified as current liabilities unless the  consolidated entity has an unconditional right to defer settlement  of the liability for at least 12 months after the end of the reporting  period. A liability is recognised for benefits accruing to employees in  respect of wages and salaries, annual leave, long service leave and  sick leave when it is probable that settlement will be required and  they are capable of being measured reliably. Liabilities recognised in respect of short-term employee benefits,  are measured at their nominal values using the remuneration rate  expected to apply at the time of settlement. Contributions to defined contribution superannuation plans are  recognised as an expense when employees have rendered service  entitling them to the contributions. Defined contribution superannuation plans Defi ned benefit superannuation plans Liabilities recognised in respect of long-term employee benefits,  are measured as the present value of the estimated future cash  outflows to be made by the consolidated entity in respect of  services provided by employees up to the end of the reporting  period. For defined benefit superannuation plans, the cost of providing  benefits is determined using the projected unit credit method, with  actuarial valuations being carried out at the end of each reporting  period. Actuarial gains and losses are recognised directly in other  comprehensive income, in the period in which they occur. Past service cost is recognised immediately in profit or loss to the  extent that the benefits are already vested, and otherwise is  amortised on a straight-line basis over the average period until the  benefits become vested. The defined benefit superannuation plan asset or liability recognised  in the statement of financial position represents the 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  unrecognised past service cost. Any asset resulting from this  calculation is limited to unrecognised actuarial losses and past  service cost, plus the present value of available refunds and  reductions in future contributions to the plan. The consolidated entity provides benefits to employees in the form  of equity-settled share-based payments, whereby employees  render services in exchange for shares or rights over shares. The fair value of share performance rights (SPRs) granted to eligible  employees under the AGL Long-Term Incentive Plan is recognised  as an employee benefits expense, with a corresponding increase in  the employee equity benefits reserve. The fair value is measured at  grant date and recognised over the period during which the  employees becomes unconditionally entitled to the SPRs. The fair  value at grant date is determined by an independent valuer. Details  regarding the determination of the fair value of share – based  payment plans are set out in Note 48. At the end of each reporting period, the consolidated entity revises  its estimate of the number of SPRs expected to vest. The amount  recognised as an expense is only adjusted when the SPRs do not  vest due to non-market related conditions. A restructuring provision is recognised when the consolidated  entity has developed a detailed formal plan for the restructuring  and has raised a valid expectation in those affected that it will carry  out the restructuring by starting to implement the plan or  announcing its main features to those affected by it. The  measurement of a restructuring provision includes only the direct  The initial estimate of the environmental restoration provision  relating to exploration, development and production facilities is  capitalised into the cost of the related asset and depreciated/ amortised on the same basis as the related asset. Changes in the  estimate of the provision for environmental restoration are treated  in the same manner, except that the unwinding of the effect of  discounting on the provision is recognised as a finance cost rather  than being capitalised into the cost of the related asset. The provision for future restoration costs is the best estimate of  the present value of the expenditure required to settle the  restoration obligation at the end of the reporting period, based on  current legal requirements and current technology. Future  restoration costs are reviewed annually and any changes in the  estimate are reflected in the present value of the restoration  provision at the end of each reporting period. A provision for environmental restoration is recognised when there  is a present obligation as a result of exploration, development and  production activities having been undertaken, and it is probable  that an outflow of economic benefits will be required to settle the  obligation. The estimated future obligations include the costs of  removing facilities and restoring the affected areas. Present obligations arising under onerous contracts are recognised  and measured as provisions. An onerous contract is considered to  exist where the consolidated entity has a contract under which the  unavoidable costs of meeting the obligations under the contract  exceed the economic benefits expected to be received under it. When some or all of the economic benefits required to settle  a provision are expected to be recovered from a third party,  a receivable is recognised as an asset if it is virtually certain that  reimbursement will be received and the amount of the receivable  can be measured reliably. The amount recognised as a provision is the best estimate of the  consideration required to settle the present obligation at the end of  the reporting period, taking into account the risks and uncertainties  surrounding the obligation. Where a provision is measured using the  cash flows estimated to settle the present obligation, its carrying  amount is the present value of those cash flows. The unwinding of  the discount on the provision is recognised in the income statement  as part of finance costs. Provisions are recognised when the consolidated entity has a  present obligation (legal or constructive) as a result of a past event,  it is probable that the consolidated entity will be required to settle  the obligation, and a reliable estimate can be made of the amount  of the obligation. Under the AGL Share Reward Plan, shares are issued to eligible  employees for no consideration and vest immediately on grant  date. On this date, the market value of the shares issued is  recognised as an employee benefits expense, with a corresponding  increase in the employee equity benefits reserve. Onerous contracts Environmental restoration