Staatsolie Annual Report 2017

Annual Report 2017 117
Staatsolie Maatschappij Suriname N.V.
Notes to the Consolidated financial statements for the years ended December 31, 2017 and 2016
(continued)
Inventories The participants are stated and Staatsolie at the lower contribute of cost to and the net financing realizable of this value. plan. Net The realizable participants value contribute is the estimated a set
selling percentage price of in their salary. ordinary Other course costs of of business, the plan are less fully estimated borne by costs Staatsolie. of completion and the estimated
costs to sell.
The plan asset value for this insured executive pension plan consist of the insurance policy covering
The participants. cost of As crude the oil insurance and refined policy products exactly is matches the purchase the amount cost, and the timing cost of of refining, the accrued including pension the
appropriate entitlements proportion of the participants, of depreciation, the fair value depletion of the and insurance amortization policy has and been overheads set at the based present on value normal of
operating the related capacity, obligations determined excluding on any a weighted effects of average future salary basis. increases.
The net realizable value of crude oil and refined products is based on the estimated selling price in the
x US$ 1,000 2017 2016 January 1, 2016
ordinary course of business, less the estimated costs of completion and the estimated costs necessary to
make Fair value the sale. of assets 3,947 2,818 2,520
Materials and supplies are valued using the weighted average cost method.
Pipeline fill
Crude oil, which is necessary to bring a pipeline into working order, is treated as a part of the related
pipeline. This is on the basis that it is not held for sale or consumed in a production process, but is
necessary to the operation of a facility during more than one operating cycle, and its cost cannot be
recouped through sale (or is significantly impaired). This applies even if the part of inventory that is
deemed to be an item of property, plant and equipment cannot be separated physically from the rest of
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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