Notes to the accounts

year ended 30 June 2001

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Accounting

Software development expenditure

policies

Software development expenditure is written off as incurred.

Deferred taxation

Deferred taxation is provided on timing differences, arising from the

different treatment of items for accounting and taxation purposes which

are expected to reverse in the future, calculated at the rates at which it is

expected that tax will arise.

Investments

Investments held as fixed assets are stated at cost less provision for any

impairment.

Foreign exchange

Transactions denominated in foreign currencies are recorded at the rates

ruling at the dates of the transactions.  Monetary assets and liabilities

denominated in foreign currencies at the balance sheet date are

translated at the rates ruling at that date.  These translation differences

are dealt with in the profit and loss account.

The financial statements of foreign subsidiaries are translated into sterling

at the closing rates of exchange and the difference arising from the

translation of the opening net investment in subsidiaries at the closing

rate and matched long term foreign currency borrowings is taken direct

to reserves.

Leases

Assets held under finance leases and hire purchase contracts are

capitalised at their fair value on the inception of the leases and

depreciated over the shorter of the period of the lease and the estimated

useful economic life of the assets.  The finance charges are allocated over

the period of the lease in proportion to the capital amount outstanding

and are charged to the profit and loss account.

Rentals on operating leases are charged to profit and loss in equal annual

amounts over the lease term.

National Insurance on share options

Full provision is made for any National Insurance liability which may be

payable by the Company in respect of gains made by individual

employees on options granted under the Company's unapproved share

option scheme.  This provision is revised to take account of the

movement in NetBenefit plc's share price at each balance sheet date.

Pensions

The Group operates a defined contribution pension scheme.

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