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Staatsolie Annual Report 2017

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Confidence in Our Own Abilities<br />

78<br />

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

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

(continued)<br />

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

ii. On assessing the useful lives of the refinery assets a different depreciation method between IFRS<br />

AFS financial and US investments GAAP was include identified. equity IFRS and requires debt securities. a component Equity depreciation investments approach classified if as components availablefor-sale<br />

of are an those asset neither have classified differing as patterns held-for-trading of benefit, nor whereas designated US GAAP at fair value allowed through depreciation profit or on loss. a<br />

After initial straight measurement, line basis. The AFS component financial depreciation investments approach are subsequently requires that measured each part at of fair an value asset item with<br />

unrealized with gains a cost or losses that is recognized significant in as relation OCI until to the the investment total cost is of derecognized, the item should at which be depreciated time, the<br />

cumulative separately. gain or Under loss is US recognized GAAP a weighted in other average operating of the income useful or lives expense, of the or different the investment components is<br />

determined was to calculated be impaired, (23.25 at which years). time, In addition, the cumulative the turnaround loss is reclassified and inspections to the consolidated (T&I) is scheduled statement in<br />

of profit 2019 or loss which in finance led to costs accelerated and removed depreciation from the for OCI. the assets The Group which evaluates will be replaced. its AFS financial The net impact assets<br />

to determine is that whether accumulated the ability and depreciation intention to amounting sell them in to the US$ near 1,176 term as is at still January appropriate. 1, 2016 and US$<br />

1,534 as at December 31, 2016 were released to the profit and loss/retained earnings.<br />

(ii) Financial liabilities<br />

iii. The “projects in progress” balance was transferred to the individual property, plant and equipment<br />

Recognition and measurement<br />

categories as follows: oil, exploration and production properties US$ 156,837, refining properties<br />

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or<br />

US$ 27,426 and other properties and equipment for US$ 31,952 as at January 1, 2016. As at<br />

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

December 31, 2016, the transferred balances amounted to US$ 131,058 to oil, exploration and<br />

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

production properties, US$ 959 to refining properties and US$ 840 to other properties and<br />

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

equipment. This reclassification is made for the consolidated financial statement disclosure<br />

overdrafts.<br />

purposes.<br />

Loans and borrowings<br />

B. This Investments is the category in associate most relevant and joint to venture the Group. After initial recognition, interest bearing loans and<br />

borrowings i. Under are US subsequently GAAP, <strong>Staatsolie</strong> measured previously at amortized accounted cost using for its the 25% EIR interest method. in Gains the Suriname and losses Gold are<br />

recognized Project in the CV consolidated (Surgold), statement as a qualifying of profit asset or loss at when net equity the liabilities value, comprising are derecognized of the as purchase well through consideration the EIR amortization and capitalized process. financing Amortized costs. is Under calculated the requirements by taking into of account IFRS, the any investment discount or in<br />

premium Surgold on acquisition classified and as fees a financial or costs asset, that are which an integral is not a qualifying part of the asset EIR. per The IAS EIR 23 amortization and therefore is<br />

included the in finance costs in are the not consolidated allowed to statement be capitalized. of profit Accordingly, loss. This the category capitalized generally finance applies cost of to<br />

interest-bearing US$ 7,529 loans and and US$ borrowings. 12,827 as at January 1, 2016 and December 31, 2016 respectively were<br />

written-off through profit and loss in the respective periods.<br />

m. Inventories<br />

ii. Furthermore, Newmont Mining Corporation, the controlling-interest party in Surgold, performed a<br />

Petroleum products are valued at the lower of cost and net realizable value.<br />

US GAAP to IFRS conversion assessment on its subsidiary Surgold. This assessment resulted in<br />

Raw materials: a slightly different IFRS net income compared to US GAAP. Consequently, <strong>Staatsolie</strong> adjusted its<br />

• Purchase profit share cost is for valued its investment on weighted in Surgold, average resulting method in a loss of US$ 13 as at January 1, 2016 and<br />

Finished a goods loss of and US$ work 7 as in at progress: December 31, 2016.<br />

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

C. Inventories<br />

operating capacity but excluding borrowing costs<br />

The primary basis of accounting for inventory is cost under both US GAAP and IFRS. As such there are<br />

no differences in cost valuation. Due to convergence, US GAAP measured Inventories similar to IFRS at<br />

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Page 78

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