Consolidated 2011 2010 $ $ Note 6. Income Tax  (a) Income Tax Recognised in the Consolidated Statement of Comprehensive Income  Tax expense comprises:  Current income tax  - 228,822 Deferred income tax  - - Total income tax expense  - 228,822 The prima facie tax on loss before income tax is reconciled to income tax expense as follows: Prima facie tax payable on loss before income tax, calculated at the Australian tax rate of 30% (2010: 30%)  (6,991,474) (4,399,505) Add (subtract) tax effect of:  Share-based payments expense  1,520,843 1,586,714 Other non-deductible items  2,422,961 732,205 Prior financial year’s income tax expense on foreign operations  - 228,822 Tax losses and temporary tax differences not recognised  3,047,670 3,126,480 Other items  - (1,045,894) Total income tax expense  - 228,822 (b) Unrecognised Deferred Tax Assets  A deferred tax asset has not been recognised in the consolidated statement of financial position as the benefits of this will only be realised if the conditions for deductibility set out in Note 1(f) occur: - Unrecognised temporary tax differences relating to deferred tax assets  5,500,782 480,814 - Tax losses:  - Australian operating losses at a rate of 30%  8,150,065 7,025,051 - Brazilian operating losses at a rate of 34%  334,002 - Potential tax benefit  13,984,849 7,505,865 (c) Current Tax Liability Income tax payable  - (235,727) Total current tax liability  - (235,727) (d) Deferred Tax Liabilities  Temporary tax differences relating to deferred tax liabilities  (67,609,198) (57,200,549) Offset by deferred tax assets relating to operating losses  67,609,198 57,200,549 Total deferred tax liabilities  - - Karoon Gas Australia Ltd  Annual Report 2011 55