FAIRFAX MEDIA  LIMITED  2013  65 NOTEs TO THE FINANCIAL sTATEMENTs  1. sUMMARY OF sIGNIFICANT ACCOUNTING POLICIEs (CONTINUED) FAIRFAx MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 30 JUNE 2013 Deferred income tax assets are recognised for all deductible  temporary differences, carry-forward of unused tax assets and  unused tax losses, to the extent that it is probable that taxable  profit will be available against which the deductible temporary  differences, and the carry-forward of unused tax assets and  unused tax losses can be utilised: Cashflows are included in the cash flow statement on a  gross basis and the GST component of cashflows arising  from investing and financing activities, which are recoverable  from, or payable to the taxation authority are classified as  operating cashflows. Commitments and contingencies are disclosed net of  the amount of GST recoverable from, or payable to, the  taxation authority. Fairfax Media Limited (the head entity) and its wholly-owned  Australian entities implemented the tax consolidation  legislation as of 1 July 2003. The current and deferred tax  amounts for each member in the tax consolidated group  (except for the head entity) have been allocated based  on stand-alone calculations that are modified to reflect  membership of the tax consolidated group. On adoption of the tax consolidation legislation, the entities  in the tax consolidated group entered into a tax sharing  agreement which, in the opinion of the Directors, limits the  joint and several liability of the wholly-owned entities in the  case of a default of the head entity, Fairfax Media Limited.  • except where the deferred income tax asset relating  to the deductible temporary difference arises from the  initial recognition of an asset or liability in a transaction  that is not a business combination and, at the time of the  transaction, affects neither the accounting profit nor taxable  profit or loss; and • in respect of deductible temporary differences associated  with investments in subsidiaries, associates and interests in  joint ventures, deferred tax assets are only recognised to  the extent that it is probable that the temporary differences  will reverse in the foreseeable future and taxable profit  will be available against which the temporary differences  can be utilised. TAx ConSolidATion – AuSTRAliA (I) LEASES (i) FinAnCe leASeS GoodS And SeRViCeS TAx (GST) The entities have also entered into a tax funding agreement  under which the wholly-owned entities fully compensate  Fairfax Media Limited for any current tax payable assumed  and are compensated by the Company for any current tax  receivable and deferred tax assets relating to unused tax  losses or unused tax credits transferred to Fairfax Media  Limited under the tax consolidation legislation. Assets or  liabilities arising under tax funding arrangements with the tax  consolidated entities are recognised as amounts receivable  from or payable to other entities in the group. The amounts  receivable/payable under the tax funding arrangements are  due upon demand from the head entity. The head entity may  also require payment of interim funding amounts to assist  with its obligations to pay tax instalments. The carrying amount of deferred income tax assets is  reviewed at each reporting date and reduced to the extent  that it is no longer probable that sufficient taxable profit will be  available to allow all or part of the deferred income tax asset  to be utilised. Deferred income tax assets and liabilities are measured at  the tax rates that are expected to apply to the year when  the asset is realised or the liability is settled, based on tax  rates (and tax laws) that have been enacted or substantively  enacted at the reporting date. Income taxes relating to items  recognised directly in equity are recognised in equity.  Deferred tax assets and deferred tax liabilities are offset only  if a legally enforceable right exists to set off current tax assets  against current tax liabilities and the deferred tax assets and  liabilities relate to the same taxable group and the same  taxation authority. Revenues, expenses and assets are recognised net of the  amount of GST except: Assets acquired under finance leases which result in the  consolidated entity receiving substantially all the risks and  rewards of ownership of the asset are capitalised at the lease’s  inception at the lower of the fair value of the leased property  or the estimated present value of the minimum lease  payments. The corresponding finance lease obligation, net of  finance charges, is included within interest bearing liabilities.  The interest element is allocated to accounting periods during  the lease term to reflect a constant rate of interest on the  remaining balance of the liability for each accounting period.  The leased asset is included in property, plant and equipment  and is depreciated over the shorter of the estimated useful life  of the asset or the lease term. This net amount of GST recoverable from, or payable to,  the taxation authority is included as part of receivables or  payables in the balance sheet. (i) where the GST incurred on a purchase of goods and  services is not recoverable from the taxation authority, in  which case the GST is recognised as part of the cost of  acquisition of the asset or as part of the expense item as  applicable; and (ii) receivables and payables are stated with the amount  of GST included.