Staatsolie Annual Report 2017

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Confidence in Our Own Abilities 52 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) Available-for-sale (AFS) financial investments c. Current versus non-current classification AFS The Group financial presents investments assets include and liabilities equity in and the debt statement securities. of financial Equity investments position based classified on current as availablefor-salcurrent distinction. are those neither classified as held-for-trading nor designated at fair value through profit or loss. and non- After initial measurement, AFS financial investments are subsequently measured at fair value with An asset is current when it is: unrealized gains or losses recognized as OCI until the investment is derecognized, at which time, the - Expected to be realized or intended to be sold or consumed in the normal operating cycle; cumulative gain or loss is recognized in other operating income or expense, or the investment is - Held primarily for the purpose of trading; determined to be impaired, at which time, the cumulative loss is reclassified to the consolidated statement - Expected to be realized within twelve months after the reporting period, or of profit or loss in finance costs and removed from the OCI. The Group evaluates its AFS financial assets - Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at to determine whether the ability and intention to sell them in the near term is still appropriate. least twelve months after the reporting period. All other assets are classified as non-current. (ii) Financial liabilities A liability is current when: Recognition and measurement - It is expected to be settled in the normal operating cycle; Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or - It is held primarily for the purpose of trading; loss, loans and borrowings, payables, as appropriate. All financial liabilities are recognized initially at fair - It is due to be settled within twelve months after the reporting period, or value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. - There is no unconditional right to defer the settlement of the liability for at least twelve months The Group’s financial liabilities include trade and other payables, loans and borrowings including bank after the reporting period. The Group classifies all other liabilities as non-current. overdrafts. Deferred tax assets and liabilities are classified as non-current assets and liabilities. Loans and borrowings This is d. the Fair category value most measurement relevant to the Group. After initial recognition, interest bearing loans and The borrowings Group measures are subsequently financial measured instruments at amortized and non-financial cost using assets, the EIR at fair method. value at Gains each and balance losses sheet are date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an recognized in the consolidated statement of profit or loss when the liabilities are derecognized as well as orderly through transaction the EIR amortization between market process. participants Amortized at cost the is measurement calculated by date. taking The into fair account value of any an discount asset or or a liability premium is on measured acquisition using and the fees assumptions or costs that that are market an integral participants part would of the use EIR. when The pricing EIR amortization the asset or is liability, included assuming in finance that costs market in the participants consolidated act statement in their economic of profit best or loss. interest. This category A fair value generally measurement applies of to a interest-bearing non-financial asset loans takes and borrowings. into account a market participant's ability to generate economic benefits from the asset’s highest and best use or by selling it to another market participant that would utilize the asset in its highest m. and Inventories best use. The Group uses valuation techniques that are appropriate in the circumstances and Petroleum for which products sufficient are valued data at are the available lower of cost to measure and net realizable fair value, value. maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair Raw materials: value is measured or disclosed in the consolidated financial statements are categorized within the fair • Purchase cost is valued on weighted average method value hierarchy. For assets and liabilities that are recognized in the consolidated financial statements at fair Finished value goods on a recurring and work basis, in progress: the Group determines whether transfers have occurred between levels in the • hierarchy Cost of direct by re-assessing materials and categorization labor and a (based proportion on the of lowest manufacturing level input overheads that is significant based on to the normal fair value operating measurement capacity as but a whole) excluding at the borrowing end of each costs reporting period. Page 62 Page 52
Annual Report 2017 53 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 Notes (continued) 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 e. Revenue and other income selling price in the ordinary course of business, less estimated costs of completion and the estimated Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group costs to sell. and the revenue can be reliably measured, regardless of when the payment is received. Revenue is measured The cost of at crude the fair oil value and of refined the consideration products is received the purchase or receivable, cost, the taking cost into of refining, account including contractually the defined appropriate terms proportion of payment of and depreciation, excluding depletion taxes or duty. and amortization Revenue from and the overheads sale of goods based is recognized on normal when operating the capacity, significant determined risks and rewards on a weighted of ownership average of basis. the goods have passed to the buyer, usually on delivery The net of realizable the goods. value Revenue of crude from oil the and sale refined of goods products is measured is based on at the the fair estimated value of selling the consideration price in the received ordinary course or receivable, of business, net of less returns the and estimated allowances, costs of trade completion discounts and and the volume estimated rebates. costs necessary to Revenue make the from sale. the sale of oil products is recognized when the significant risks and rewards of ownership have Materials been and transferred, supplies are which valued is considered using the weighted to occur average when title cost passes method. to the customer. This generally occurs when the product is physically transferred into a vessel, pipe or other delivery mechanism. Revenues Pipeline fill are recorded from the sales of thermal energy when the product is delivered at a fixed or determinable Crude oil, which price, is title necessary has transferred to bring and a pipeline collectability into working is reasonably order, assured. 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 Sales between group companies, as disclosed in the operating segment information, are based on prices necessary to the operation of a facility during more than one operating cycle, and its cost cannot be generally equivalent to commercially available prices. 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 Interest income inventory. It is valued at cost and is depreciated over the useful life of the related asset. For all financial instruments measured at amortized cost, interest income is recorded using the effective interest rate (“EIR”). The EIR is the rate that exactly discounts the estimated future cash receipts over the n. Impairment of non-financial assets expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount The Group assesses at each reporting date whether there is an indication that an asset may be impaired. of the financial asset. Interest income is included in finance income in the statement of profit or loss. 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 Dividends generating units (CGU) fair value less costs of disposal and its value in use. It is determined for an Revenue is recognized when the Group’s right to receive the payment is established, which is generally individual asset, unless the asset does not generate cash inflows that are largely independent of those when shareholders approve the dividend. from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable f. Foreign amount, currencies the asset is considered impaired and is written down to its recoverable amount. In assessing The consolidated value in financial use, the statements estimated future are presented cash flows in are United discounted States to dollars their present (US$), value which using is also a pretax Group’s discount functional rate that currency reflects and current presentation market assessments currency. Each of entity the time in the value Group of money determines and the its risks own the specific functional to currency the asset. and In determining items included fair value in the less financial costs statements of disposal, of recent each market entity is transactions measured using are taken that into functional account. currency. If no such Within transactions the Group, can GOw2 be identified, can be considered an appropriate as foreign valuation operations, model is used. whose functional Impairment currency changed losses of from continuing US$ to operations the Surinamese are recognized dollars (SRD) in the effective consolidated January statement 1, 2016. of This profit change or loss in arose those due expense to the change categories in major consistent contracts with the previously function denominated of the impaired in US$ asset, to SRD. except Therefore, a property as it relates previously to GOw2, revalued transactions where the are revaluation initially recorded was taken in the to functional OCI. In currency this case, (being the SRD) impairment at the is rate also of exchange recognized ruling OCI at up the to date the of amount the transaction. of any previous revaluation. (i) Transactions and balances Page 63 Page 53
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Staatsolie Annual Report 2017

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