IGO Interactive Annual Report 2018

Notes to the consolidated financial statements 30 June 2018 (continued) 5 Income tax (continued) (h) Significant estimates The Group is subject to income taxes in Australia and jurisdictions where it has foreign operations. Significant judgement is required in determining deferred tax assets and liabilities. There are many transactions and calculations during the ordinary course of business for which the ultimate tax determination is uncertain. In addition, deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future forecast taxable profits are available to utilise those temporary differences and losses, and the tax losses continue to be available having regard to the relevant tax legislation associated with their recoupment. The Australian consolidated tax group has recognised a deferred tax asset relating to carry forward tax losses of $180,695,000 at 30 June 2018 (2017: $198,571,000). The utilisation of this deferred tax asset amount depends upon future taxable amounts in excess of profits arising from the reversal of temporary differences. The Group believes this amount to be recoverable based on taxable income projections. 6 Earnings per share (a) Earnings used in calculating earnings per share Profit used in calculating basic and diluted earnings per share attributable to ordinary equity holders of the parent is $52,686,000 (2017: $17,011,000). (b) Weighted average number of shares used as the denominator 2018 Number 2017 Number Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share 586,808,843 580,422,734 Adjustments for calculation of diluted earnings per share: Share rights 2,261,529 1,333,910 Weighted average number of ordinary and potential ordinary shares used as the denominator in calculating diluted earnings per share 589,070,372 581,756,644 (c) Information concerning the classification of securities Share rights Share rights granted to Executives and employees under the Company's Employee Incentive Plan and any outstanding service rights are included in the calculation of diluted earnings per share as they could potentially dilute basic earnings per share in the future. The share rights are not included in the determination of basic earnings per share. Further information about the share rights is provided in note 26. (d) Calculation of earnings per share (i) Basic earnings per share Basic earnings per share is calculated by dividing: • the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares • by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares. (ii) Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account: • the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and • the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. Independence Group NL 17 IGO ANNUAL REPORT 2018— 81 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 30 JUNE 2018