Staatsolie Annual Report 2017

Annual Report 2017 49
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
Section 2. Basis of preparation and other significant accounting policies
selling price in the ordinary course of business, less estimated costs of completion and the estimated
costs to sell.
2.1 Basis of preparation
The cost of crude oil and refined products is the purchase cost, the cost of refining, including the
appropriate
The consolidated
proportion
financial
of depreciation,
statements of
depletion
Staatsolie
and
as a
amortization
group have
and
been
overheads
prepared in
based
accordance
on normal
with
operating
International
capacity,
Financial
determined
Reporting
on
Standards
a weighted
(IFRS)
average
as
basis.
issued by the International Accounting Standards
Board (IASB).
The net realizable value of crude oil and refined products is based on the estimated selling price in the
ordinary
The consolidated
course of
financial
business,
statements
less the estimated
have been
costs
prepared
of completion
on a historical
and the
cost
estimated
basis, except
costs necessary
for financial
to
make
instruments
the sale.
that have been measured at fair value. The consolidated statements are presented in US
dollars, and all values are rounded to the nearest thousand (US$ thousand), except when otherwise
Materials and supplies are valued using the weighted average cost method.
indicated.
Pipeline fill
2.2 Basis of consolidation
Crude oil, which is necessary to bring a pipeline into working order, is treated as a part of the related
The consolidated financial statements comprise the financial statements of Staatsolie and its controlled
pipeline. This is on the basis that it is not held for sale or consumed in a production process, but is
subsidiaries as at December 31, 2017 and 2016.
necessary to the operation of a facility during more than one operating cycle, and its cost cannot be
recouped Control is achieved through sale when (or the is Group significantly is exposed, impaired). or has This rights, applies to variable even returns if the part from of its inventory involvement that with is
deemed the investee to be and has item the of property, ability to affect plant and those equipment returns through cannot its be power separated over physically the investee. from Specifically, the rest of
inventory. the Group It controls is valued an at investee cost and if, is and depreciated only if, the over Group the has useful all of life the of following: the related asset.
• Power over the investee (i.e., existing rights that give it the current ability to direct the relevant
n. activities Impairment of the investee); of non-financial assets
The • Group Exposure, assesses or at rights, each to reporting variable date returns whether from its there involvement is an indication with the that investee; an asset may be impaired.
If any • indication The ability exists, to use or its when power annual over impairment the investee testing to affect for its an returns. asset is required, the Group estimates
the Generally, asset’s there recoverable is a presumption amount. An that asset’s a majority recoverable of voting amount rights is result the higher in control. of an To asset’s support cash this
generating presumption units and (CGU) when the fair Group value has less less costs than of a disposal majority of and the its voting, value or in similar, use. It rights is determined of an investee, for an it
individual considers asset, all relevant unless facts the asset and circumstances does not generate in assessing cash inflows whether that are it has largely power independent over an investee, of those
from including: other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its
recoverable
• The
amount,
contractual
the
arrangement(s)
asset is considered
with the
impaired
other vote
and
holders
is written
of the
down
investee;
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
• Rights arising from other contractual arrangements;
• The Group’s voting rights and potential voting rights.
specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken
The relevant activities are those which significantly affect the subsidiary’s returns. The ability to approve
into account. If no such transactions can be identified, an appropriate valuation model is used.
the operating and capital budget of a subsidiary and the ability to appoint key management personnel are
Impairment
decisions that
losses
demonstrate
of continuing
that
operations
the Group
are
has
recognized
the existing
in the
rights
consolidated
to direct the
statement
relevant
of
activities
profit or
of
loss
a
in
subsidiary.
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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