Notes to the Financial Statements 80 5. Revenue and expenses  continued www.kingsgate.com.au 6. Income tax 2013  $’000 2012  $’000 a)  Income tax expense Current tax  3,670  15,591 Deferred tax (19,559) 680 Income tax (benefit) / expense (15,889) 16,271 Deferred tax expense / (benefit) included in tax expense comprises: (Increase) / decrease in deferred tax assets  32,486  (4,908) Increase / (decrease) in deferred tax liabilities  (52,045) 5,588 Deferred tax  (19,559)  680 Impairment – Challenger Gold Project The Group announced on 28 June 2013 the impair- ment of the carrying value of the Challenger Gold  Mine as a result of the change of the mine plan to  focus on the higher grade Challenger West  orebody. The revised mine plan is the result of a  strategic review of the Challenger Gold Mine in  response to the significant and sustained decline  in gold price and the mine’s operating perfor- mance over the 2013 financial year. An impairment is recognised when the carrying  amount exceeds the recoverable amount. The  recoverable amount for Challenger Gold Mine  cash-generating unit has been determined based  on its value in use (“VIU”). The impairment test  is assessed at the cash-generating unit (“CGU”)  level, which is the lowest level for which identifi- able cash inflows are largely independent of the  cash flows of other assets. The VIU approach is  based on the present value of the future cash  flows expected to be derived from the CGU. While the Challenger Gold Project is expected  to generate positive cash flows based on  the revised plan, the cash flow estimates no  longer support the full recovery of the carrying  value. As a result of this assessment, the  Group has recorded an impairment charge of  $311,850,000 pre-tax, related to the carrying  value of the property, plant and equipment and  mine properties at Challenger Gold Project. The key assumptions and estimates used in deter- mining the recoverable amount (VIU) are related  to gold price, gold production, discount rate,  operating costs and capital expenditures. The  basis for determination of the impairment was: 〉 gold price  – future gold price was primarily  based on current hedging programs  consisting of 50,000 ounces of gold at a  delivery price of A$1,435 per ounce, 6,500  ounces at a delivery price of A$1,160 per  ounce and a spot price of A$1,425 for the  balance of production; 〉 gold production  – future gold production  was based on the new mine plan; 〉 discount rate  – a pre-tax discount rate of  10%; and 〉 operating costs and capital expenditure – these costs were based on historic mining  costs, new mining contract cost estimates,  existing royalty rates with the South  Australian Government and the local land  owners and management’s best estimates at the time of the impairment testing. The impact on recoverable amount from varying  the above assumptions has been assessed and,  given the relatively short period of the expected  remaining mine life of the Challenger Gold  Project, has been assessed as having an immate- rial impact on the impairment charge.