NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
NOT E 1 - STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued  
 
Deferred tax assets and liabilities are ascertained based on temporary di fferences 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 liabilit y, excluding a business combination, where there is no ef fect on 
accounting or taxable profit or loss. 
 
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 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. 
 
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 occu r. Deferred 
tax assets and liabilities are o ffset 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 
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.  
   
The head entity of the inc ome 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. 
   
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.  
 
 
  
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