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## notes to the financial statements 

for the year ended 30 June 2001 

Transurban has advice from Senior Counsel that the concession fees should be immediately deductible expenditure. The Accounts have been prepared on this basis. Deductions in respect of concession fees account for $509,254,000 of the consolidated entity’s carried-forward loss of $809,228,000 at 30 June 2001. 

The Company and the ATO have been unable to agree on the treatment to be applied to concession fees and as a consequence the ATO issued an assessment in respect of the Company’s income tax return for the year ended 30 June 1998. 

Transurban lodged an objection to this assessment on 16 August 2000 and on 17 November 2000 the ATO disallowed the objection. On 21 December 2000, Transurban lodged an appeal in the Federal Court against the ATO decision to disallow the objection. The appeal is still progressing through directions and discovery processes and no date is set for hearing of the matter. 

If the ATO’s position on deductibility of the Concession Notes is confirmed, the after tax internal rate of return for an investor subject to the corporate tax rate will be reduced to approximately 85 per cent of the return which would have been achieved if the concession fees were immediately deductible. 

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