Notes to the Consolidated Financial Statements Continued Note 6. Income Tax continued Consolidated Net foreign Recognition currency of temporary difference on differences translation and tax losses Charged of financial Restated not previously Charged (Credited) statements to Balance as at brought to (Credited) to Directly to presentation Balance as at 1 July 2020 account Profit or Loss Equity currency30 June 2021 (c) Deferred Tax Balances US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 Temporary differences Provisions and accruals 397 250 7,631 – 39 8,317 Equity raising transaction costs 340 – 21 (143) 31 249 Unrealised foreign currency (gains)/losses (12,570) – 20,960 – (1,133) 7,257 Translation adjustment – – (1,387) – – (1,387) Fair value movement of financial liabilities – – 2,255 – – 2,255 Farm‑out expenditures 88 – – – 9 97 Right‑of‑use assets (222) (191) (104,738) – (21) (105,172) Lease liabilities 242 206 106,237 – 25 106,710 Other 1 – 2 – – 3 Total temporary differences (11,724) 265 30,981 (143) (1,050) 18,329 Unused tax losses Tax losses 4 20,434 (4,014) – – 16,424 Total unused tax losses 4 20,434 (4,014) – – 16,424 Net deferred tax assets/ (liabilities) (11,720) 20,699 26,967 (143) (1,050) 34,753 Presented in the consolidated statement of financial position as follows: Deferred tax assets – 36,528 Deferred tax liabilities (11,720) (1,775) Consolidated Restated 2021 2020 (d)Unrecognised Deferred Tax Assets US$’000 US$’000 A deferred tax asset has not been recognised in the consolidated statement of financial position as the benefits of which will only be realised if the conditions for deductibility set out in Note 1(f) occur: Unrecognised temporary tax differences relating to deferred tax assets at a tax rate of 34% 16,982 49,667 Tax losses: Brazilian operating losses at a tax rate of 34% – 27,733 Tax losses: Peruvian operating losses at a tax rate of 32% 6,168 5,331 Potential tax income 23,150 82,731 (e) Unrecognised Taxable Temporary Differences Temporary tax differences relating to deferred tax liabilities – (193) Offset by deferred tax assets relating to operating losses – 193 Total deferred tax liabilities (unrecognised) – – Karoon Energy Ltd 102 Annual Report 2021