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6. Net financing costs

2019
$m

Restated
2018
$m1

Finance income

Interest income

10

10

10

10

Finance costs

Interest expense2

127

158

Lease interest expense

10

7

Unwinding of discounts on provisions and other liabilities

35

33

Unwinding of discount on deferred consideration

23

24

Other finance costs

8

8

203

230

Net financing costs

193

220

  1. 1 Comparatives have been restated for the adoption of AASB 16 Leases. Refer to Note 38(c).
  2. 2 Interest expense for the year ended 30 June 2019 is presented net of capitalised interest of $21 million (2018: $11 million).

The weighted average capitalisation rate on funds borrowed for finance costs capitalised is 5.61% (2018: 5.64%).

ACCOUNTING POLICY

Net financing costs

Interest income is recognised in profit or loss as it accrues, using the effective interest method.

Finance costs directly attributable to the acquisition, construction or production of qualifying assets, are added to the cost of those assets.

All other finance costs are recognised in profit or loss in the period in which they are incurred. Finance costs comprise interest expense on borrowings calculated using the effective interest method, amortisation of borrowing costs relating to long-term financing facilities, unwinding of the discount on provisions and deferred consideration, and gains and losses on certain hedging instruments that are recognised in profit or loss.

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