Staatsolie Annual Report 2015

Pensions and other postretirement benefits
The provision for pensions and other postretirement
benefits is based on assumptions which are used in an
actuarial evaluation. Pension accounting requires explicit
assumptions regarding, among others, the expected
return on plan assets, the discount rate for benefit
obligations and the rate for inflation and salary developments.
The assumptions are reviewed annually by management and
adjusted as appropriate. The actuarial evaluation is
performed by an independent actuarial firm.
Litigation contingencies
As at December 31, 2015 there are pending lawsuits
against Staatsolie and its subsidiary GOw2 Energy
Suriname N.V. Management has regular litigation reviews,
including updates from its Corporate Legal Affairs
Division and their external lawyers to assess the need for
accounting recognition or disclosure of these contingencies. In
accordance with US GAAP criteria for contingencies, it is
required that liabilities for contingencies are recorded only
if it is probable that a liability has been incurred at the date
of the balance sheet and if the liability incurrence can be
reasonably estimated. These estimated amounts for the
liability incurrence are not reduced by amounts that may be
recovered under insurance or claims against third parties.
Undiscounted receivables from insurers or other third parties
may be accrued separately. Staatsolie revises such accruals
in light of new information or developments, if any. Based
on a consideration of all relevant facts and circumstances,
Staatsolie does not believe that the ultimate outcome of any
currently pending lawsuit against Staatsolie and its subsidiary
GOw2 Energy Suriname N.V. will have a material adverse
effect upon Staatsolie's operations, financial condition, or
financial statements taken as a whole.
Tax contingencies
Staatsolie and its subsidiaries, except for SPCS enjoying an
income tax holiday until year‐end 2015, are subject to income
taxation. Significant management judgement is required in
the accounting for income tax contingencies and tax disputes
because the outcomes are often difficult to predict.
US GAAP requires recognition and measurement of uncertain
tax positions that the company has taken or expects to take
in its income tax returns. The benefit of an uncertain tax
position can only be recognized in the financial statements if
management concludes that it is more likely than not that the
position will be sustained with the tax authorities.
Technician in the refinery controlling room
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CONFIDENCE IN OUR OWN ABILITIES