70 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 The debentures are convertible into shares on a one-for-one  basis at the option of the holder provided that conversion will  not result in a breach of any of the following: • Nature of the products and services; • Nature of the production processes; • Type or class of customer for the products and services; • Methods used to distribute the products or provide the  services; and if applicable (i) any provision of the Foreign Acquisitions and  Takeovers Act 1975; (ii) any undertaking given by the Company to the Foreign  Investment Review Board or at the request of the Foreign  Investment Review Board from time to time; or (iii) any other applicable law including, without limitation the  Broadcasting Act 1942. • Nature of the regulatory environment. Operating segments that meet the quantitative criteria as  prescribed by AASB 8 are reported separately. However,  an operating segment that does not meet the quantitative  criteria is still reported separately where information about the  segment would be useful to users of the financial statements. Information about other business activities and operating  segments that are below the quantitative criteria are  combined and disclosed in a separate category for  “Other segments”. Basic earnings per share (EPS) is calculated by dividing the net  profit attributable to members, adjusted to exclude costs of  servicing equity other than ordinary shares, by the weighted  average number of ordinary shares outstanding during the  financial year, adjusted for any bonus elements in ordinary  shares issued during the financial year. (V) EARNINGS PER SHARE BASiC eARninGS PeR SHARe (X) SIGNIFICANT ACCOUNTING ESTIMATES  ANDJUDGEMENTS diluTed eARninGS PeR SHARe (W) SEGMENT REPORTING The carrying amounts of certain assets and liabilities are  determined based on estimates and assumptions of future  events. The key estimates and assumptions that have a  significant risk of causing a material adjustment to the  carrying amounts of certain assets and liabilities within  the next financial year are: Diluted earnings per share is calculated by dividing the basic  EPS earnings adjusted by the after tax effect of interest  and other financing costs associated with dilutive potential  ordinary shares and the effect on revenues and expenses  of conversion to ordinary shares associated with dilutive  potential ordinary shares by the weighted average number of  ordinary shares and dilutive potential ordinary shares adjusted  for any bonus issue.  The Group tests annually or at each reporting date  where there is an indication of impairment. This requires  an estimation of the recoverable amount of the cash  generating units (CGU), using a value in use methodology,  as detailed in Note 1(D). (i) iMPAiRMenT oF GoodWill And inTAnGiBleS  WiTH indeFiniTe uSeFul liVeS An operating segment is a component of an entity that  engages in business activities from which it may earn  revenues and incur expenses (including revenue and expense  relating to transactions with other components of the same  entity), whose operating results are regularly reviewed by the  entity’s chief operating decision maker to make decisions  about resources to be allocated to the segment and assess  its performance and for which discrete financial information  is available. Management will also consider other factors in  determining operating segments such as the existence of a  line manager and the level of segment information presented  to the Board of Directors. The assumptions used in this estimation of recoverable  amount and the carrying amount of goodwill and intangibles  with indefinite useful lives, along with a sensitivity analysis, are  detailed in Note 14. The Group is subject to income taxes in Australia and  jurisdictions where it has foreign operations. Judgement is  required in determining the Group’s provision for income  taxes. There are many transactions and calculations  undertaken during the ordinary course of business for which  the ultimate tax determination is uncertain.  Operating segments have been identified based on the  information provided to the chief operating decision makers,  being the Board of Directors, Chief Executive Officer and Chief  Financial Officer and are disclosed in Note 37. The Group measures the cost of equity-settled transactions  with employees by reference to the fair value of equity  instruments at the date at which they are granted. The fair  value is determined by an external independent valuer using a  Monte Carlo model, using the assumptions detailed in Note 31. The group aggregates two or more operating segments  when they have similar economic characteristics, and the  segments are similar in each of the following respects: (ii) inCoMe TAxeS (iii) SHARe-BASed PAyMenT TRAnSACTionS