Staatsolie Annual Report 2017

Annual Report 2017 131
Staatsolie Maatschappij Suriname N.V.
Notes to the Consolidated financial statements for the years ended December 31, 2017 and 2016
(continued)
Future Inventories minimum are stated lease at payments the lower under of cost non-cancellation and net realizable operating value. leases Net realizable as at December value is 31, the 2017 estimated and
2016 selling are, price as follows: in the ordinary course of business, less estimated costs of completion and the estimated
costs to sell.
The x US$ cost 1,000 of crude oil and refined products is the purchase 2017 cost, the 2016 cost of refining, including the
Within one year 6,295 6,764
appropriate proportion of depreciation, depletion and amortization and overheads based on normal
After one year but not more than five years 5,457 4,118
operating capacity, determined on a weighted average basis. 11,752 10,882
The net realizable value of crude oil and refined products is based on the estimated selling price in the
Other contractual obligations / commitments
ordinary course of business, less the estimated costs of completion and the estimated costs necessary to
x US$ 1,000 2017 2016
make the sale.
Within one year 6,916 3,563
After one year but not more than five years 844 3,045
Materials and supplies are valued using the weighted average cost method.
7,760 6,608
Sales
Pipeline
contractual
fill
obligations
The
Crude
Group
oil, which
has sales
is necessary
obligations
to
of
bring
US$
a
13,986
pipeline
as at
into
December
working order,
31, 2017
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
x US$ 1,000 2017 2016
necessary Within one to year the operation of a facility during more than 9,816 one operating 29,088 cycle, and its cost cannot be
After one year but not more than five years 4,170 4,131
recouped through sale (or is significantly impaired). This applies even if the part of inventory that is
13,986 33,219
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.
Legal claim contingency
The Group also has a legal claim relating to a lease contract where there is not enough probability to
n. Impairment of non-financial assets
reasonably recommend a provision. The case is not pending in the courts of Suriname nor have been
The Group assesses at each reporting date whether there is an indication that an asset may be impaired.
entered into arbitration. The case has been reviewed by the in-house legal department. Based hereon it is
If any indication exists, or when annual impairment testing for an asset is required, the Group estimates
advised to the Group that the case is only possible, but not probable that the action will succeed.
the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash
Accordingly, no provision for any liability has been made in these consolidated financial statement for this
generating units (CGU) fair value less costs of disposal and its value in use. It is determined for an
case.
individual asset, unless the asset does not generate cash inflows that are largely independent of those
The Group currently has legal claims amounting to US$ 1,384 (exclusive of interest and judicially
from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its
imposed penalties) relating to labor related matters pending in the courts of Suriname of which a
recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In
provision
of
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
US$ 190 as at December 31, 2017 is recorded in these consolidated financial statements. Based on legal
advice obtained, management is of the view that the Group is in a strong and defendable position and
specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken
that no further provision is required.
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.
Page 131 63