NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2000 The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables. (k) Income Tax (l) Inventory (m) Investments (n) Leased Assets (o) Principles of Consolidation 40 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. 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. 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. 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. Inventory is valued at the lower of cost and net realisable value. Gar