- 60 -  In addition to its own current and deferred tax amounts, Sundance Energy Australia Limited, as head company, also  recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused  tax credits assumed from controlled entities in the tax consolidated group.  The head entity of the income tax consolidated group and the controlled entities in the tax consolidated group  account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the  tax consolidated group continues to be a standalone taxpayer in its own right.  Sundance Energy Australia Limited and its wholly-owned Australian controlled entities have agreed to implement  the income tax consolidation regime, with Sundance Energy Australia Limited being the head company of the newly  consolidated group. Under this regime the group entities will be taxed as a single taxpayer. Whilst this choice is yet  to be communicated to the Australian Taxation Office, it is intended to be communicated prior to lodgement of the  31 December 2014 income tax return and will be effective from 1 January 2014. Sundance Energy Australia Limited  and its wholly-owned Australian controlled entities intend to enter into a Tax Sharing Agreement and Tax Funding  Agreement in due course. Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that  net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred  tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and  liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different  taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective  asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are  expected to be recovered or settled.  Tax Consolidation  Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it  is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be  utilized. Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint  ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary  difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.  Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the  asset recognised or the liability is settled, based on tax rates enacted or substantively enacted at the reporting date.  Their measurement also reflects the manner in which management expects to recover or settle the carrying amount  of the related asset or liability.  Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of  assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where  amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised  from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on  accounting or taxable profit or loss.  NOTE 1 - STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 