Notes to and forming part of the Financial  Statements for the year ended 30 June 2003 1. Statement of Significant Accounting Policies  (a) Basis of Accounting  (e) Consumer Finance Loans  (f) Land and Buildings (b) Principles of Consolidation  (g) Depreciation and Amortisation of Property,  Plant and Equipment  (c) Cash and Cash Equivalents (d) Receivables Repayments of consumer finance loans are allocated  between principal and interest components. Interest  on consumer finance loans is recognised as income  as each repayment instalment falls due.  The financial statements have been prepared as a  general purpose financial report which complies with  the requirements of the Corporations Act 2001,  Australian Accounting Standards and Urgent Issues  Group Consensus Views and other authoritative  pronouncements.  Unearned revenue on consumer finance loans has  been calculated using actuarial methods so that  revenue earned over the term of the contract bears a  constant relationship to funds employed. Income is  brought to account on consumer finance loans only  where it has been paid or where it is unpaid but  recovery is certain.  The financial report has been prepared in accordance  with the historical cost convention using the accounting policies described below. These policies  are consistent with those adopted in the previous year  unless otherwise stated. Further they do not take  account of changes in either the general purchasing  power of the dollar or in the prices of specific assets,  except for land and buildings, which are stated at fair  value, as described in Note 14.  It is the policy of the consolidated entity to review  annually the values of land and buildings based on the  use of the properties by the consolidated entity as a  going concern. The directors have elected to carry  these land and buildings at fair value. The valuations  take no account of any potential capital gains tax as it  is the intention of the consolidated entity to hold the  properties as part of its ongoing operations.  The consolidated financial statements include the  financial statements of the parent entity, Harvey  Norman Holdings Limited, and its controlled entities  (refer Note 40) referred to collectively throughout  these financial statements as the “consolidated entity”.  All intergroup transactions and balances have been  eliminated. Franchisees are not controlled by the  consolidated entity and have not been consolidated. Where an entity began or ceased to be controlled  during the year, the results are included only from the  date control commenced or up to the date control  ceased.  Properties in the ACT which are held under a 99 year  ground crown land sublease from the Commonwealth  Government, are not amortised over the remaining life  of the lease, as the expectation is that these leases  will be renewed at minimal cost once they expire. Buildings on these sites are depreciated over their  useful lives using the straight line method. New  assets are depreciated from the time of acquisition. Profits and losses on disposal of property, plant and  equipment are taken into account in determining the  profit for the year. Financial statements of foreign controlled entities  presented in accordance with overseas accounting  principles are, for consolidation purposes, adjusted to  comply with group policy and generally accepted  accounting principles in Australia.  Property, plant and equipment, excluding freehold  land and leasehold property, are depreciated over  their useful economic lives using the straight line  method as follows:  Cash on hand and in banks and short-term deposits  are stated at nominal value. For the purposes of the  Statement of Cash Flows, cash includes cash on hand  and in banks and deposits at call, net of outstanding  bank overdrafts. Trade receivables are recognised and carried at  original invoice amount less a provision for any  uncollectible debts. An estimate of the provision for  doubtful debts is made when collection of the full  amount is no longer probable. Bad debts are written- off as incurred.  The directors have elected to carry plant and  equipment at cost. Asset Class  Life  Buildings 20-40 years Owned Plant and Equipment  3-20 years  Plant and Equipment Under Lease  1-10 years  29  HARVEY NORMAN HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES – ANNUAL REPORT 2003 