Annual Report 2010 - SBM Offshore

Notes to the consolidated
financial statements
General information
SBM Offshore N.V. is a company domiciled in
Rotterdam, the Netherlands. SBM Offshore N.V. is the
holding company of a group of international, marine
technology oriented companies. The consolidated
financial statements for the year ended 31 December
2010 comprise the financial statements of SBM
Offshore N.V. and its subsidiaries (together referred to
as ‘the Company’) and the Company’s interest in associates
and jointly controlled entities as at 31 December
each year.
The Company serves on a global basis the offshore oil
and gas industry by supplying engineered products,
vessels and systems, and offshore oil and gas production
services. The Company has its listing on the
Euronext Amsterdam stock exchange.
Statement of compliance
The consolidated financial statements of SBM
Offshore N.V. have been prepared in accordance with
International Financial Reporting Standards (IFRS)
and interpretations, adopted by the EU where effective
for financial years beginning after 1 January 2010.
The consolidated financial statements are presented
in thousands of US Dollars. The consolidated financial
statements have been prepared under the historical
cost convention except for derivative financial instruments
that are stated at fair value.
These consolidated financial statements were authorised
for issue by the Board of Management on 3 March
2011.
Summary of significant accounting policies
The principal accounting policies applied in the preparation
of these consolidated financial statements are
set out below. These policies have been consistently
applied to all years presented, unless otherwise stated.
Overview of IFRS developments
(a) Standards, amendments and interpretations effective
in 2010.
Financial Review / Financial Statements 2010
• IFRS 3 (revised), ‘Business combinations’ and IAS
27 (amended), ‘Consolidated and Separate Financial
Statements’
IFRS 3 (revised) introduces significant changes in the
accounting for business combinations occurring after
becoming effective. Changes affect the valuation of noncontrolling
interest, the accounting for transaction costs,
the initial recognition and subsequent measurement of
a contingent consideration and business combinations
achieved in stages. These changes impact the amount
of goodwill recognised, the reported results in the period
that an acquisition occurs and the future reported results.
IAS 27 (amended) requires that a change in the ownership
interest of a subsidiary (without loss of control)
is accounted for as a transaction with owners in their
capacity as owners. Therefore, such transactions will
no longer give rise to goodwill, nor give rise to a gain or
loss. Furthermore, the amended standard changes the
accounting for losses incurred by the subsidiary as well as
the loss of control of a subsidiary.
These changes in accounting policy were applied prospectively
and had no impact on the financial statements
as no transaction occurred during the year 2010.
• IFRS 5 (amendment), ‘Non-current assets held-for-sale
and discontinued operations’ .The amendment clarifies
that IFRS 5 specifies the disclosures required in respect
of non-current assets (or disposal groups) classified as
held for sale or discontinued operations. It also clarifies
that the general requirements of IAS 1 still apply, in
particular paragraph 15 (to achieve a fair presentation)
and paragraph 125 (sources of estimation uncertainty)
of IAS 1. The change in accounting policy was applied
prospectively and had no impact on the financial statements
as no transaction occurred during the year 2010.
• IAS 1 (amendment), ‘Presentation of financial statements’.
The amendment clarifies that the potential
settlement of a liability by the issue of equity is not relevant
to its classification as current or non-current. By
amending the definition of current liability, the amendment
permits a liability to be classified as non-current
(provided that the entity has an unconditional right to
defer settlement by transfer of cash or other assets for
at least 12 months after the accounting period) notwithstanding
the fact that the entity could be required
by the counterparty to settle in shares at any time. The
change in accounting policy was applied prospectively
and had no impact on the financial statements as no
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