NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2000
38
1. SUMMARY OF ACCOUNTING POLICIES
Financial Reporting Framework
The financial report is a general purpose financial report which has been prepared in accordance
with the Corporations Law, application Account Standards and Urgent Issues Group Consensus
Views, and complies with other requirements of the law.
The financial report has been prepared on the basis of historical cost and except where stated, does
not take into account changing money values or current valuations of non-current assets. Cost is
based on the fair values of the consideration given in exchange for assets.
Significant Accounting Policies
Accounting policies are selected and applied in a manner which ensures that the resulting financial
information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of
the underlying transaction or other events is reported.
The following significant accounting policies have been adopted in the preparation and presentation
of the financial report:
(a) Accounts Payable
Trade payables and other accounts payable are recognised when the economic entity becomes
obliged to make future payments resulting from the purchase of goods and services.
(b) Acquisition of Assets
Assets acquired are recorded at the cost of acquisition, being the purchase consideration
determined as at the date of acquisition plus costs incidental to the acquisition.
In the event that settlement of all or part of the cash consideration given in the acquisition of
an asset is deferred, the fair value of the purchase consideration is determined by discounting
the amounts payable in the future to their present value as at the date of acquisition.
(c) Borrowings
Bills of exchange are recorded at an amount equal to the net proceeds received, with the
premium or discount amortised over the period until maturity. Interest expense is recognised
on an effective yield basis.
Debentures, bank loans and other loans are recorded at an amount equal to the net proceeds
received. Interest expense is recognised on an accrual basis.
Ancillary costs incurred in connection with the arrangement of borrowings are deferred and
amortised over the period of the borrowings.
(d) Capital Gains Tax
No provision has been made for capital gains tax which may arise in the event of sale of
revalued assets as no decision has been made to sell any of these assets.
(e) Capitalisation of Borrowing Costs
Borrowing costs directly attributable to building under construction are capitalised as part of
the cost of those assets.