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Staatsolie Annual Report 2017

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Confidence in Our Own Abilities<br />

150<br />

<strong>Staatsolie</strong> Maatschappij Suriname N.V.<br />

Notes to the Consolidated financial statements for the years ended December 31, <strong>2017</strong> and 2016<br />

(continued)<br />

(c) Available-for-sale Hedge accounting (AFS) financial investments<br />

The AFS changes financial in investments IFRS 9 relating include to hedge equity and accounting debt securities. will have Equity no impact investments as <strong>Staatsolie</strong> classified does as not availablefor-sale<br />

hedge are those accounting. neither classified as held-for-trading nor designated at fair value through profit or loss.<br />

currently<br />

apply<br />

After initial measurement, AFS financial investments are subsequently measured at fair value with<br />

unrealized 2. IFRS gains 15 Revenue or losses from recognized Contracts as OCI with until Customers the investment is derecognized, at which time, the<br />

cumulative IFRS 15 was gain issued or loss in May is 2014 recognized and establishes in other operating a five-step income model to or account expense, for or revenue the investment arising from is<br />

contracts determined with to be customers. impaired, at Under which IFRS time, the 15, cumulative revenue is loss recognized is reclassified at an to the amount consolidated that reflects statement the<br />

consideration of profit or loss to in which finance costs entity and expects removed to be from entitled the in OCI. exchange The Group for transferring evaluates its goods AFS or financial services assets to a<br />

customer.<br />

determine whether the ability and intention to sell them in the near term is still appropriate.<br />

The new revenue standard will supersede all current revenue recognition requirements under IFRS.<br />

Either (ii) Financial a full retrospective liabilities application or a modified retrospective application is required for annual periods<br />

beginning Recognition on and or after measurement January 1, 2018. Early adoption is permitted.<br />

Financial <strong>Staatsolie</strong> liabilities plans to are adopt classified, the new at standard initial recognition, on the required as financial effective liabilities date using at fair the value modified through retrospective profit or<br />

loss, method. loans and borrowings, payables, as appropriate. All financial liabilities are recognized initially at fair<br />

value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.<br />

During <strong>2017</strong>, <strong>Staatsolie</strong> commenced its preliminary assessment of IFRS 15, which may be subject to<br />

The Group’s financial liabilities include trade and other payables, loans and borrowings including bank<br />

changes as more detailed analysis is completed. Furthermore, <strong>Staatsolie</strong> is considering the clarifications<br />

overdrafts.<br />

issued by the IASB in April 2016 and will monitor any further development.<br />

Loans <strong>Staatsolie</strong> and is borrowings<br />

the business of exploring for, developing, producing, refining and selling oil and electricity<br />

This to customers is the category in various most locations relevant around to the the Group. world. To After date, initial <strong>Staatsolie</strong> recognition, has identified interest the bearing following loans issues and<br />

borrowings that require are consideration: subsequently measured at amortized cost using the EIR method. Gains and losses are<br />

recognized in the consolidated statement of profit or loss when the liabilities are derecognized as well as<br />

through (a) Provisionally the EIR amortization priced sales process. Amortized cost is calculated by taking into account any discount or<br />

As premium discussed on acquisition under IFRS and 9 fees Financial or costs Instruments that are an above, integral from part time of to the time EIR. <strong>Staatsolie</strong> The EIR may amortization enter into is<br />

contracts included in contain finance provisional costs in the pricing consolidated features statement which are considered of profit or loss. to be This embedded category derivatives. generally applies to<br />

Under<br />

interest-bearing<br />

IAS 18 Revenue,<br />

loans and<br />

revenue<br />

borrowings.<br />

is recognized at the estimated fair value of the total consideration<br />

received or receivable when the crude oil is shipped and risks and rewards are considered to have<br />

passed.<br />

m.<br />

This<br />

Inventories<br />

fair value is based on the most recently determined estimate of crude oil price given the<br />

specific<br />

Petroleum<br />

quality<br />

products<br />

of the<br />

are<br />

crude<br />

valued<br />

and<br />

at<br />

the<br />

the<br />

estimated<br />

lower of cost<br />

forward<br />

and<br />

price<br />

net realizable<br />

which the<br />

value.<br />

entity expects to receive. The initial<br />

estimate Raw materials: of the fair value of the embedded derivative, and subsequent changes in fair value up until final<br />

settlement, • Purchase are cost also is valued estimated on weighted by reference average to forward method market prices. The subsequent changes in fair<br />

value are recognized in the statement of profit or loss and other comprehensive income each period until<br />

Finished goods and work in progress:<br />

final settlement.<br />

• Cost of direct materials and labor and a proportion of manufacturing overheads based on normal<br />

operating capacity but excluding borrowing costs<br />

Page Page 150 62

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