Notes to the financial statements (cont’d) For the year ended 30 June 2012 (p) Goods and service tax (GST) (ii)  Uncertain Tax Position (q) Deferred acquisition costs (r)   Investment contract liabilities and claims  expense (i)   Investment contracts with Discretionary  Participation Features (DPF) (ii) Other investment contracts  page 70 Revenues, expenses and assets (excluding receivables) are  recorded net of GST. GST input tax credits are initially recorded  as an asset and GST collected as a liability. These balances  are offset as at the reporting date and recognised as either  an amount receivable or payable to the Australian Taxation  Office. The GST portion relating to financial supplies and non- deductible expenditure, for which an input tax credit cannot  be claimed, is expensed or is recognised as part of the cost of  acquisition of an asset. Receivables and payables are stated inclusive of the amount of  GST receivable or payable. The net amount of GST recoverable  from, or payable to, the Australian Taxation Office is included  with other receivables or payables in the statement of financial  position. Cash flows are presented in the statement of cash flows on a  gross basis. The GST components of cash flows arising from  investing or financing activities which are recoverable from,  or payable to, the Australian Taxation Office are presented as  operating cash flows. Deferred acquisition costs relate to service fees paid, and are  deferred as an asset in recognition that they relate to a future  economic benefit. Deferred acquisition costs are initially  measured at historical cost and are written down immediately  to their recoverable amount if the carrying amount is greater  than its estimated recoverable amount. Deferred acquisition costs are progressively amortised in profit  or loss by a systematic allocation over the period of time the  future economic benefits are expected to be received. The  amortisation period is between 5 and 7 years. On the 27 June 2012, Tax Laws Amendment (2012 Measures  No. 2) Act 2012 (“The 2012 Act”) was substantially enacted.  It sought to limit the availability of deductions previously  made available by the passing of Tax Laws Amendment (2010  Measures No. 1) Act 2010 (“The 2010 Act”). Both Acts contain  a number of amendments to the tax consolidation regime  that deal with rights to future income assets acquired upon  an entity joining a tax consolidated group. The 2012 Act limits  deductions that were available under the 2010 Act in respect  to the tax cost setting amount of those assets, and under the  business related expenditure provisions.  As such IOOF has reclassified some tax positions relating to  deductions made by IOOF and its subsidiaries. The 2012 Act  expressly protects certain deductions claimed under the  2010 Act where an assessment notice was received prior to  30 March 2011. Consequently, the amount received in respect  to deductions claimed in IOOF’s 2010 Income Tax Return  has been credited to profit as an income tax benefit in the  2012 year. The impact of the above reclassifications resulted  in an increase to current tax liability of $23.5m, a reduction  to income tax expense of $6.9m, and a decrease in deferred  tax liability of $30.4m. IOOF is still analysing the 2012 Act and  therefore all potential deductions cannot be quantified at this  stage. The value of these liabilities changes in relation to the change  in unit prices for unit linked contracts, and are decreased by  management fee charges. In accordance with the rules of the  funds, any remaining surplus is attributed to the policyholders.  Adjustments to the liabilities at each reporting date are  recorded in profit or loss. The Company is also appealing to the Administrative Appeals  Tribunal in respect to the result of an ATO private ruling it  sought to confirm its entitlement to deductions under the  2010 Act. For these reasons the matter is ongoing. The value of these liabilities changes in relation to the change  in unit prices for unit linked contracts, and are decreased by  management fee charges. In accordance with the rules of the  funds, any remaining surplus is attributed to the members of  Where the tax contribution amount recognised by each  member of the tax-consolidated group for a particular period  is different to the aggregate of the current tax liability or asset  and any deferred tax asset arising from unused tax losses  and tax credits in respect of that period, the difference is  recognised as a contribution from (or distribution to) equity  participants. Further information about the tax funding arrangement is  detailed in note 10 to the financial statements. Due to the existence of a tax funding arrangement between  the entities in the tax-consolidated group, amounts are  recognised as payable to or receivable by the company and  each member of the group in relation to the tax contribution  amounts paid or payable between the parent entity and the  other members of the tax-consolidated group in accordance  with the arrangement.  recognised by the Company (as head entity in the tax- consolidated group).