77 AGL Energy Limited Annual Report 2012 tax-consolidated group in accordance with the arrangement.  Further information about the tax funding arrangement is detailed  in Note 10 to the financial statements.  Deferred tax is recognised on temporary differences between the  carrying amounts of assets and liabilities in the financial statements  and the corresponding tax bases used in the computation of taxable  profit. Deferred tax liabilities are generally recognised for all taxable  temporary differences. Deferred tax assets are generally recognised  for all deductible temporary differences to the extent that it is  probable that taxable profits will be available against which those  deductible temporary differences can be utilised. Such deferred tax  assets and liabilities are not recognised if the temporary difference  arises from goodwill or from the initial recognition (other than in a  business combination) of other assets and liabilities in a transaction  that affects neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at the end  of each reporting period and reduced to the extent that it is no  longer probable that sufficient taxable profits will be available to  allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that  are expected to apply in the period in which the liability is settled or  the asset realised, based on tax rates (and tax laws) that have been  enacted or substantively enacted by the end of the reporting period.  The measurement of deferred tax liabilities and assets reflects the  tax consequences that would follow from the manner in which the  consolidated entity expects, at the end of the reporting period, to  recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset when there is a legally  enforceable right to set off current tax assets against current tax  liabilities and when they relate to income taxes levied by the same  taxation authority and the consolidated entity intends to settle its  current tax assets and liabilities on a net basis. Current and deferred tax are recognised as an expense or income in  profit or loss, except when they relate to items that are recognised  outside profit or loss (whether in other comprehensive income or  directly in equity), in which case the tax is also recognised outside  profit or loss, or where they arise from the initial accounting for  a business combination. In the case of a business combination,  the tax effect is included in the accounting for the  business combination. The Parent Entity and its wholly-owned Australian resident  subsidiaries formed a tax-consolidated group under Australian  taxation law with effect from 25 October 2006 and are therefore  taxed as a single entity from that date. AGL Energy Limited is the  head entity in the tax-consolidated group.  Tax expense/income, deferred tax liabilities and deferred tax assets  arising from temporary differences of the members of the  tax-consolidated group are recognised in the separate financial  statements of the members of the tax-consolidated group using  the ‘stand alone taxpayer’ approach by reference to the carrying  amounts in the separate financial statements of each entity and the  tax values applying under tax consolidation. Current tax liabilities and  assets and deferred tax assets arising from unused tax losses and tax  credits of the members of the tax-consolidated group are recognised  by the Parent Entity (as head entity in the tax-consolidated group). 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 Parent Entity 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   AASB 9 will be mandatory for the consolidated entity’s 30 June  2016 financial statements. The potential impact on the  consolidated entity’s financial statements has not yet been  determined.   The most significant effect of AASB 9 regarding the classification  and measurement of financial liabilities relates to the accounting  for changes in fair value of a financial liability (designated as at  fair value through profit or loss) attributable to changes in the  credit risk of that liability. For financial liabilities designated at  fair value, the portion of the change in fair value due to changes  in own credit risk now generally must be presented in other  comprehensive income, rather than through profit or loss.  AASB 9 requires all recognised financial assets that are within  the scope of AASB 139  Financial Instruments :  Recognition and  Measurement  to be subsequently measured at amortised cost  or fair value.  AASB 9  Financial Instruments  and its associated amending  Standards introduce new requirements for the classification  and measurement of financial assets and financial liabilities  and for derecognition.  The IASB has deferred the application date for the international  equivalent to AASB 9,  IFRS 9 , until 1 January 2015. As a result,  the AASB has issued a related exposure draft, ED 215  Mandatory  Effective Date of IFRS 9 . This proposed amendment to AASB 9  is in pending status at the reporting date.  A number of Australian Accounting Standards have been issued by  the AASB but are not effective for the year ended 30 June 2012,  but will be applicable to the consolidated entity in future reporting  periods. Diluted earnings per share is determined by dividing the profit for  the year attributable to owners of AGL Energy Limited, by the  weighted average number of ordinary shares outstanding during  the period and dilutive potential ordinary shares. Basic earnings per share is determined by dividing the profit for the  year attributable to owners of AGL Energy Limited, by the weighted  average number of ordinary shares outstanding during the period. On 29 June 2012, AGL Generation Proprietary Limited, a subsidiary  of AGL Energy Limited (AGL), acquired the remaining 67.46%  of the shares in, and loan notes issued by, Great Energy Alliance  Corporation Pty Limited (GEAC) and 100% of the shares in Loy  Yang Marketing Holdings Pty Limited (LYMH) which it did not  already own. GEAC, LYMH and their subsidiaries are not eligible  to be members of the existing AGL tax-consolidated group. On  23 July 2012, the LYMH entities joined a new tax-consolidated  group which was formed by AGL Generation Holdco Pty Ltd, a  subsidiary of AGL. On 27 July 2012, the GEAC entities joined the  new tax-consolidated group. AGL Generation Holdco Pty Ltd is  the head entity in the new tax-consolidated group.  (ah) Earnings per share Deferred tax (ai) Standards and Interpretations in issue not yet adopted > AASB 9  Financial Instruments,  AASB 2009-11  Amendments  to Australian Accounting Standards arising from  AASB 9 and  AASB 2010-7  Amendments to Australian Accounting Standards  arising from AASB 9 (December 2010)  are expected to be  effective for annual reporting periods beginning on or after  1 January 2015 (previously 1 January 2013).  Current and deferred tax for the period Tax consolidation