Staatsolie Annual Report 2017

Annual Report 2017 107
Staatsolie Maatschappij Suriname N.V.
Staatsolie Maatschappij Suriname N.V.
Notes to the Consolidated financial statements for the years ended December 31, 2017 and 2016
(continued)
Notes to the Consolidated financial statements for the years ended December 31, 2017 and 2016
(continued)
Inventories are stated at the lower of cost and net realizable value. Net realizable value is the estimated
xUS$ 1,000 2017 2016
selling Summarised price statement in the ordinary of profit course or loss of Suriname business, Gold less Project estimated CV: costs of completion and the estimated
costs Revenue to sell.
643,136 117,154
Cost of Sales (237,710) (33,810)
Administrative expenses, including depreciation $109,818 (2016: $17,520) (136,224) (47,698)
The cost of crude oil and refined products is the purchase cost, the cost of refining, including the
Management Fee (14,302) (3,189)
appropriate Profit before tax proportion of depreciation, depletion and amortization 254,900 and overheads 32,457 based on normal
Group's share of the profit for the year 63,725 8,114
operating capacity, determined on a weighted average basis.
The net realizable value of crude oil and refined products is based on the estimated selling price in the
The Group had no contingent liabilities or capital commitments relating to its interest in the Suriname
ordinary course of business, less the estimated costs of completion and the estimated costs necessary to
Gold Project CV as at December 31, 2017 and 2016 and January 1, 2016. The joint venture had no
make the sale.
contingent liabilities or capital commitments as at December 31, 2017 and 2016 and January 1, 2016.
Materials and supplies are valued using the weighted average cost method.
Taking into account the structure and control of this partnership, Staatsolie’s interest is accounted for at
the net equity value. The contribution of GoS of US$ 63,087, which represents a 4.8% beneficial
Pipeline fill
ownership in Suriname Gold Project C.V., relates to their financial contributions made in 2016 on
Crude oil, which is necessary to bring a pipeline into working order, is treated as a part of the related
Staatsolie’s behalf to the limited partnership agreement with Newmont Suriname LLC. These financial
pipeline. This is on the basis that it is not held for sale or consumed in a production process, but is
contributions were made by GoS as Staatsolie had limited funds available due to the sharp decline in oil
necessary to the operation of a facility during more than one operating cycle, and its cost cannot be
prices in 2016. Those contributions are recognized as a current account with GoS as disclosed in note
recouped through sale (or is significantly impaired). This applies even if the part of inventory that is
6.4 and was repaid in 2018 (note 8.1). The Suriname Gold Project C.V. as at December 31, 2017 and
deemed to be an item of property, plant and equipment cannot be separated physically from the rest of
2016, were based on audited figures.
inventory. It is valued at cost and is depreciated over the useful life of the related asset.
n. Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired.
If any indication exists, or when annual impairment testing for an asset is required, the Group estimates
the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash
generating units (CGU) fair value less costs of disposal and its value in use. It is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pretax
discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken
into account. If no such transactions can be identified, an appropriate valuation model is used.
Impairment losses of continuing operations are recognized in the consolidated statement of profit or loss
in those expense categories consistent with the function of the impaired asset, except for a property
previously revalued where the revaluation was taken to OCI. In this case, the impairment is also
recognized in OCI up to the amount of any previous revaluation.
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