Cue Energy Resources Limited Notes to the financial statements 30 June 2023 Note 7. Exploration activities (continued) 14 Accounting policy on exploration activities AASB 6 Exploration for and Evaluation of Mineral Resources allows the Group to either capitalise or expense exploration and evaluation expenditure incurred. Exploration and evaluation costs have been capitalised on the basis that the consolidated entity expects to commence commercial production in the future, from which time the costs will be amortised in accordance with the policy on the amortisation of proportion assets. Costs are only capitalised that are expected to be recovered either through successful development or sale of the relevant mining interest. To the extent that capitalised costs are determined not to be recoverable in the future, they will be written off in the period in which this determination is made. Note 8. Corporate and administration expenses Consolidated 2023 2022 $'000 $'000 Employee expenses 1,200 1,308 Accounting and audit fees 597 393 Share based payments 96 188 Depreciation expense 94 84 Superannuation contribution expense 57 71 Business development expenses 13 773 Legal expenses 3 19 Other expenses 425 222 Total administration expenses 2,485 3,058 Note 9. Income tax expense Consolidated 2023 2022 $'000 $'000 Income tax expense Current tax 9,154 7,902 Adjustment recognised for current tax in prior periods - 299 Initial Recognition of previously unrecognised net deferred tax assets (1,027) - Deferred tax - origination and reversal of temporary differences (3,457) (2,513) Aggregate income tax expense 4,670 5,688 Numerical reconciliation of income tax expense and tax at the statutory rate Profit before income tax expense 19,881 21,756 Tax at the statutory tax rate of 30% 5,964 6,527 Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Recognition of deferred tax (assets)/liabilities (3,814) (2,513) Difference in overseas tax rates 1,653 2,833 Differences arising from the application of royalty regimes 827 485 Other balances and permanent differences (615) (2,422) Prior year tax losses not recognised/(recognised) 655 479 4,670 5,389 Adjustment recognised for current tax in prior periods - 299 Income tax expense 4,670 5,688 The Consolidated Entity's effective tax rate for the year ended 30 June 2023 was 23% (30 June 2022: 26%). 60 Cue Energy Resources Limited Annual Report 2023
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