ArcelorMittal South Africa 2007 Annual Report Page 94 Notes to the group and company annual financial statements continued for the year ended 31 December 2007 Only obligations recognised in the balance sheet represent the present value of the defined benefit obligation as adjusted for unrecognised actuarial gains and losses and unrecognised past service cost, and as reduced by the fair value of plan assets. 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. Medical No contributions are made to the medical aid of retired employees, except for a closed group of early retirees in respect of whom contributions are made. The present value of the post-retirement medical aid obligation for such early retirements is actuarially determined annually on the projected unit credit method and any deficit or surplus is immediately recognised in profit or loss. The cost of all short-term employee benefits, such as salaries, bonuses, housing allowances, medical and other contributions, is recognised during the period in which the employee renders the related service. Bonus plans The group and company recognise a liability and an expense for bonuses, based on a formula that takes into consideration cost, profit, cash generation, employment equity and safety targets. Termination benefits Termination benefits are payable whenever an employee’s employment is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits. The group and company recognise termination benefits when it is demonstrably committed to either: •  terminate the employment of current employees according to a detailed formal plan without possibility of withdrawal; or •  provide termination benefits as a result of an accepted offer made to encourage voluntary redundancy in exchange for these benefits. Share-based compensation Refer to the share-based payments, note 3.32. 3.28 Provisions, contingent assets and contingent liabilities Provisions Provisions for asset retirement obligations, environmental remediation obligations, onerous contracts, restructuring costs and legal claims are recognised when: •  a present legal or constructive obligation exists as a result of past events; •  it is probable that an outflow of resources will be required to settle the obligation; and •  the amount has been reliably estimated. The nature, background and treatment of asset retirement obligations and environmental remediation provisions is detailed in note 28. Onerous contract provisions comprise primarily operating lease termination penalties. Restructuring provision comprises employee termination payments and other directly related expenditure not associated with ongoing activities. Provisions are not recognised for future operating losses or for capital expenditure of an environmental nature relating to an operational facility. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation.