Pr o ft be f or e inc ome t a x include the f ol lo wing specifc e xpenses In mil lions o f A UD C onsolida t ed N ot e 2019 2018 Emplo y ee e xpenses 7859 6859 Ra w ma t erials and c onsumables 1841 1612 Oc cupanc y c os ts 1186 1095 Ext ernal servic e c os ts 456 392 E quit y se ttled shar e based pa y men t tr ans ac tions 8a 36 22 C on tributions t o de fned c on tri bution pos t emplo ymen t plans included in emplo y ee e xpenses a b ove 330 284 Impairmen t char ges 630 L os s gain on s ale o f pr oper t y plan t and equipmen t 19 06 Ne t gain on f or eign e x change 46 40 Ac c oun ting polic y Expenses Financ e le ase pa ymen ts Minimum le ase pa ymen ts ar e appor tioned be tw een the fnanc e char ge and the r educ tion o f the outs t anding liabilit y T he fnanc e char ge is al loca t ed t o e ach period during the le ase t erm so as t o pr oduc e a c ons t an t periodic r a t e o f in t er es t on the r emaining balanc e o f the liabilit y Financ e inc ome and fnanc e e xpense Financ e inc ome c omprises in t er es t inc ome on funds in v es t ed and is r ec ognised in the pr o ft and los s s t a t emen t as it ac crues using the e f f ec tiv e in t er es t me thod Financ e e xpense c omprises in t er es t e xpense on borr o wings calcula t ed using the e f f ec tiv e in t er es t me thod and gains and los ses on hedging ins trumen ts tha t ar e r ec ognised in the pr o ft and los s s t a t emen t see no t e 4a T he in t er es t e x pense c omponen t o f fnanc e le ase pa ymen ts is r ec ognised in the pr o ft and los s s t a t emen t using the e f f ec tiv e in t er es t me thod F or eign curr enc y gains and los ses F or eign curr enc y gains and los ses ar e r epor t ed on a ne t basis De fned c on tribution super annua tion funds Obliga tions f or c on tributions t o de fned c on tribution super annua tion funds ar e r ec ognised as an e xpense in the pr o ft and los s s t a t emen t as incurr ed Shor t t erm servic e bene fts Shor t t erm emplo y ee bene fts ar e e xpensed as the r ela t ed servic e is pr o vided A liabilit y is r ec ognised f or the amoun t e xpec t ed t o be paid if the Gr oup has a pr esen t legal or c on s truc tiv e obliga tion t o pa y this amoun t as a r esult o f pas t servic e pr o vided b y the emplo y ee and the obliga tion can be es tima t ed r eliably L ong t erm servic e bene fts T he Gr oup s ne t obliga tion in r espec t o f long t erm servic e bene fts is the amoun t o f futur e bene ft tha t emplo y ees ha v e e arned in r e turn f or their servic e in the curr en t and prior periods T ha t bene ft is disc oun t ed t o de t ermine its pr esen t v alue R e me asur emen ts ar e r ec ognised in the pr o ft or los s in the period in which the y arise Shar e based pa ymen t tr ans ac tions T he gr an t da t e f air v alue o f equit y se ttled shar e based pa y men t arr angemen ts gr an t ed t o emplo y ees is r ec ognised as an e xpense with a c orr esponding incr e ase in equit y o v er the v es ting period o f the a w ar ds T he amoun t r ec ognised as an e xpense is ad jus t ed t o r e fec t the number o f a w ar ds f or which the r ela t ed servic e and nonmark e t per f ormanc e c onditions ar e e xpec t ed t o be me t such tha t the amoun t ultima t ely r ec ognised is based on the number o f a w ar ds tha t mee t the r ela t ed servic e and nonmark e t per f ormanc e c onditions a t the v es ting da t e F or shar e based pa ymen t a w ar ds with non v es ting c onditions the gr an t da t e f air v al ue o f the shar e based pa ymen t is me asur ed t o r e fec t such c onditions and ther e is no true up f or dif f er enc es be tw een e xpec t ed and ac tual out c omes T he f air v alue o f the amoun t pa y able t o emplo y ees in r espec t o f cash se ttled shar e based a w ar ds is r ec ognised as an e xpense with a c orr esponding incr e ase in liabilities o v er the period in which the emplo y ees bec ome unc ondi tional ly en titled t o pa ymen t T he liabilit y is r e me asur ed t o f air v alue a t e ach r epor ting da t e and a t se ttlemen t da t e An y changes in the f air v alue o f the liabilit y ar e r ec ognised as emplo y ee e xpenses in pr o ft or los s 1D EXPENSES C ONTINUING OPERA TIONS 53 ALS LIMITED AND IT S SUBSIDIARIES A NNU AL F INANCIAL R EPOR T F OR THE Y EAR E NDED 31 M AR CH 2019 F INANCIAL REPOR T F INANCIAL S T A TEMENT S N O TES T O THE FINANCIAL S T A TEMENT S Financial o v ervie w