Notes to the Financial Statements 69 c . Revenue Gold and silver sales d .  Income tax Tax consolidation  b .  Foreign currency translation (i)   Transactions and balances (ii)  Foreign operations Tax funding and sharing agreements Foreign currency transactions are translated  into the respective functional currencies of the  Group entities at exchange rates on the dates of  the transactions. Foreign exchange gains and  losses resulting from the settlement of such  transactions and from the translation at year- end exchange rates of monetary assets and  liabilities denominated in foreign currencies are  recognised in the profit or loss, except when  they are deferred in equity as qualifying cash  flow hedges and qualifying net investment  hedges or are attributable to part of the net  investment in a foreign operation. Revenue is measured at the fair value of the  consideration received or receivable. Sales  revenue represents the net proceeds receivable  from the buyer.  Gold and silver revenue is recognised when the  refinery process has been finalised at which  point the sale transaction to a third party is also  completed. Transportation and refinery costs  are expensed when incurred.  Translation differences on assets and liabilities  carried at fair value are reported as part of the  fair value gain or loss. Translation differences on  non-monetary assets and liabilities such as  equities held at fair value through profit or loss  are recognised in profit or loss as part of the fair  value gain or loss. Translation differences on  non-monetary assets are included in the fair  value reserve in equity. Exchange gains and losses which arise on  balances between Group entities are taken to  the foreign currency translation reserve where  the intra-group balances are in substance part of  the Group’s net investment. Where as a result of  a change in circumstances, a previously desig- nated intra-group balance is intended to be  settled in the foreseeable future, the intra-group  balance is no longer regarded as part of net  investment. The exchange differences for such  balance previously taken directly to the foreign  currency translation reserves are recognised in  the profit or loss.  The results and financial position of all the  Group entities (none of which has the currency  of a hyperinflationary economy) that have a  functional currency different from the presenta- tion currency are translated into the presenta- tion currency as follows: Income tax expense comprises current and  deferred tax. Current tax and deferred tax is  recognised in profit or loss except to the extent  that it relates to a business combination, or  items recognised directly in equity or in other  comprehensive income. Current tax is the expected tax payable or  receivable on the taxable income or loss for the  year, using tax rates enacted or substantively  enacted at the reporting date, and any adjust- ment to tax payable in respect of previous years.  Deferred tax is provided using the liability  method, providing for temporary differences  between the carrying amounts of assets and  liabilities for financial reporting purposes and  the amounts used for taxation purposes. The  amount of deferred tax provided is based on the  expected manner of realisation or settlement of  the carrying amount of assets and liabilities,  using tax rates enacted or substantively enacted  at the reporting date.  A deferred tax asset is recognised for unused tax  losses, tax credits and deductible temporary  differences, to the extent that it is probable that  future taxable profits will be available against  which they can be utilised. Deferred tax assets  are reviewed at each reporting date and are  reduced to the extent that it is no longer prob- able that the related tax benefit will be realised. Deferred tax is not recognised for: The members of the tax-consolidation group  have entered into a funding agreement that sets  out the funding obligations of members of the  tax-consolidation group in respect of tax  amounts. The tax funding arrangements require  payments to or from the head entity equal to  the current tax liability or asset assumed by the  head entity and any deferred tax asset assumed  by the head entity, resulting in the head entity  recognising an intra-group receivable or payable  in the separate financial statements of the  members of the tax-consolidation group equal in  amount to the tax liability or asset assumed. The  intra-group receivables or payables are at call. Deferred tax assets and liabilities are offset if  there is a legally enforceable right to offset  current tax liabilities and assets, and they relate  to income taxes levied by the same tax authority  on the same taxable entity. Additional income tax expenses that arise from  the distribution of cash dividends are recognised  at the same time that the liability to pay the  related dividend is recognised. The Company and its wholly-owned Australian  resident entities formed a tax-consolidation  group with effect from 1 July 2003 and are  therefore taxed as a single entity from that date.  The head entity within the tax-consolidation  group is Kingsgate Consolidated Limited. Current tax expense or benefit, deferred tax  assets and deferred tax liabilities arising from  temporary differences of the members of the  tax-consolidation group are recognised in the  separate financial statements of the members of the tax-consolidation 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 assets or liabilities and deferred tax  assets arising from unused tax losses assumed  by the head entity from the subsidiaries in the  tax-consolidation group, are recognised as  amounts receivable or payable to other entities  in the tax-consolidation group in conjunction  with any tax funding agreement amounts. The Company recognises deferred tax assets  arising from unused tax losses of the tax-consoli- dation group to the extent that it is probable  that future taxable profits of the tax-consolida- tion group will be available against which the  asset can be utilised. 〉 the assets and liabilities of the foreign opera- tions, including goodwill and fair value  adjustments arising on acquisition, are  translated at the year-end exchange rate; 〉 the income and expenses of foreign opera- tions are translated at average exchange  rates (unless this is not a reasonable approxi- mation of the cumulative effect of the rate  prevailing on the transaction dates, in which  case income and expenses are translated at  the dates of the transactions); and  〉 foreign currency differences are recognised in  other comprehensive income, and presented  in the foreign currency translation reserve. 〉 taxable temporary differences arising on the  initial recognition of goodwill. 〉 temporary differences related to invest- ments in subsidiaries where the Company is  able to control the timing of the reversal of  the temporary differences and it is probable  that they will not reverse in the foreseeable  future; and 〉 temporary differences on the initial recogni- tion of assets or liabilities in a transaction  that is not a business combination and that  affects neither accounting nor taxable profit  or loss; Notes t o the Financial Statements continued