NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2000
40
The net amount of GST recoverable from, or payable to, the taxation authority is included as
part of receivables or payables.
(k) Income Tax
Tax-effect accounting principles are adopted whereby income tax expense is calculated on pre-
tax accounting profits after adjustment for permanent differences. The tax-effect of timing
difference, which occur when items are included or allowed for income tax purposes in a period
different to that for accounting is shown at current taxation rate in provision for deferred
income tax and future income tax benefit, as applicable.
(l) Inventory
Inventory is valued at the lower of cost and net realisable value.
(m) Investments
Investments are recorded at the lower of cost and recoverable amount.
Dividend revenue is recognised on a receivable basis. Interest revenue is recognised on an
accrual basis.
(n) Leased Assets
Hire Purchase leased assets are capitalised as fixed assets. The amount initially brought to
account is the present value of minimum hire purchase payments.
A Hire Purchase lease is one which effectively transfers from the lessor to the lessee
substantially all the risks and benefits incidental to ownership of the leased property.
Capitalised hire purchase assets are depreciated on a reducing balance basis. 
Hire Purchase lease payments are allocated between interest expense and reduction of lease
liability over the term of the lease. The interest expense is determined by applying the interest
rate implicit in the lease to the outstanding lease liability at the beginning of each lease
payment period.
Operating lease payments are recognised as an expense on a basis which reflects the pattern in
which economic benefits from the leased asset are consumed.
(o) Principles of Consolidation
The consolidated financial statements are prepared by combining the financial statements of
all the entities that comprise the economic entity, being the company (the parent entity) and
its controlled entities as defined in accounting standard AASB 1024 “Consolidated
Accounts”. A list of controlled entities appears in note 11 to the financial statements.
Consistent accounting policies are employed in the preparation and presentation of the
consolidated financial statements.
The consolidated financial statements include the information and results of each controlled
entity from the date on which the company obtains control and until such time as the
company ceases to control such entity.
In preparing the consolidated financial statements, all intercompany balances and
transactions, and unrealised profits arising within the economic entity are eliminated in full.