Staatsolie Annual Report 2017

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Annual Report 2017 143 Staatsolie Maatschappij Suriname N.V. Notes to the Consolidated financial statements for the years ended December 31, 2017 and 2016 (continued) Inventories determining are stated the recoverability at the lower of of a cost trade and or net other realizable receivable, value. the Net Group realizable performs value is a the risk estimated analysis selling considering price the in the type ordinary and age course of the outstanding of business, receivable less estimated and the costs creditworthiness of completion of the and counterparties. the estimated costs to sell. Prepaid expenses and other current assets consisted of the following: The cost of crude oil and refined products is the purchase cost, the cost of refining, including the appropriate proportion of depreciation, depletion and amortization and overheads As at January based 1, on normal x US$ 1,000 2017 2016 2016 operating capacity, determined on a weighted average basis. Receivable from personnel 18 10 440 The net realizable value of crude oil and refined products is based on the estimated selling price in the Prepaid to puchasing agents - - 750 ordinary Prepaid insurance course of costs business, less the estimated costs of completion 805 and the 916 estimated costs 832 necessary to make Receivable the sale. from Surgold - 8,660 - Interim dividend 6,000 - - Materials Downpayment and supplies vendors are valued using the weighted average 4,246cost method. 12,631 16,630 Prepaid purchased goods, services and other 8,714 4,562 5,407 Net sales tax receivable 7,392 17,693 19,245 Pipeline fill 27,175 44,472 43,304 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 6.3 Inventories 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 As of at January inventory 1, that is deemed x US$ 1,000 to be an item of property, plant and equipment 2017 cannot be separated 2016physically from 2016 the rest of inventory. It is valued at cost and is depreciated over the useful life of the related asset. Petroleum products 3,089 22,943 20,829 Materials and supplies 58,674 39,755 43,699 Ordered n. goods Impairment of non-financial assets 461 3,171 7,861 Carrying value at NRV 62,224 65,869 72,389 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 During 2017, US$ 950 was recognized as an expense for inventories to recognize a provision for the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash obsolete inventories. During 2016 US$ 194 was released from the provision for obsolete inventories. generating units (CGU) fair value less costs of disposal and its value in use. It is determined for an individual During 2017, asset, US$ unless 236,866 the (2016: asset US$ does 242,163) not generate was recognized cash inflows as that an expense are largely for independent inventories carried of those at from cost. This other is assets recognized or groups in cost of of assets. sales. 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. Page 143 63
Confidence in Our Own Abilities 144 Staatsolie Maatschappij Suriname N.V. Notes to the Consolidated financial statements for the years ended December 31, 31, 2017 2017 and and 2016 2016 (continued) Available-for-sale (AFS) financial investments 6.4 Trade payables, accruals and other liabilities AFS financial investments include equity and debt securities. Equity investments classified as availablefor-sale x US$ 1,000 are those neither classified as 2017 held-for-trading nor 2016 designated at fair value 2016through profit or loss. As at January 1, After initial measurement, AFS financial investments are subsequently measured at fair value with Trade payables 90,570 96,618 110,350 unrealized gains or losses recognized as OCI until the investment is derecognized, at which time, the Accrued liabilities 95,709 87,839 49,014 cumulative Other liabilities gain or loss is recognized 1,816in other operating 5,441income or expense, 13,263 or the investment is determined to be impaired, at which 188,095 time, the cumulative 189,898 loss is reclassified 172,627 to the consolidated statement of profit or loss in finance costs and removed from the OCI. The Group evaluates its AFS financial assets to Terms determine and conditions whether the of the ability above and financial intention liabilities: to sell them in the near term is still appropriate. - Trade payables are non-interest bearing and are normally settled on 30-day terms. (ii) Financial - Accruals liabilities consist mainly of a current account with the GoS amounting to US$ 63,087 Recognition (2016: and US$ measurement 63,087), accrued interest on loans and allowances payable to management and Financial personnel. liabilities are All items classified, are non-interest at initial recognition, bearing and as are financial normally liabilities settled at on fair 30-day value terms. through profit or loss, - loans Other and liabilities borrowings, include payables, sales, dividend as appropriate. and payroll All financial tax payables liabilities and are are non-interest recognized bearing. initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts. Loans and borrowings This is the category most relevant to the Group. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in the consolidated statement of profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance costs in the consolidated statement of profit or loss. This category generally applies to interest-bearing loans and borrowings. m. Inventories Petroleum products are valued at the lower of cost and net realizable value. Raw materials: • Purchase cost is valued on weighted average method Finished goods and work in progress: • Cost of direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs Page 144 62
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Staatsolie Annual Report 2017

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