Staatsolie Annual Report 2017

Annual Report 2017 89
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
Oil properties
selling price in the ordinary course of business, less estimated costs of completion and the estimated
The application of the Group’s accounting policy for exploration and evaluation expenditure requires
costs to sell.
judgment to determine whether future economic benefits are likely from future either exploitation or sale,
or The whether cost of activities crude oil have and not refined reached products a stage is which the purchase permits a cost, reasonable the cost assessment of refining, of the including existence the
of appropriate reserves. The proportion determination of depreciation, of reserves depletion and resources and amortization is, in itself, and estimation overheads process based that on involves normal
varying operating degrees capacity, of determined uncertainty on depending a weighted on average how the basis. resources are classified. These estimates directly
impact The net when realizable the Group value of defers crude exploration oil and refined and products evaluation is based expenditure. on the estimated The deferral selling policy price requires in the
management ordinary course to of make business, certain less estimates the estimated and assumptions costs of completion about future and the events estimated and costs circumstances, necessary to in
particular, make the sale. whether an economically viable extraction operation can be established. Any such estimates
and assumptions may change as new information becomes available. If, after expenditure is capitalized,
Materials and supplies are valued using the weighted average cost method.
information becomes available suggesting that the recovery of the expenditure is unlikely, the relevant
capitalized amount is written off in the statement of profit or loss in the period when the new information
Pipeline fill
becomes available.
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 to the operation of a facility during more than one operating cycle, and its cost cannot be
2.5.1 Changes in accounting policies and disclosures
recouped through sale (or is significantly impaired). This applies even if the part of inventory that is
New deemed and to amended be an item standards of property, and plant interpretations and equipment cannot be separated physically from the rest of
The inventory. Group It applied is valued for at the cost first and time is depreciated certain amendments over the useful to the life standards, of the related which asset. are effective for annual
periods beginning on or after January 1, 2017. The Group has not early adopted any standards,
interpretations n. Impairment or amendments of non-financial that have been assets issued but are not yet effective.
The nature Group assesses and the impact at each of each reporting amendment date whether is described there is below: 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
the Amendments asset’s recoverable to IAS 7 Statement amount. An of Cash asset’s Flows: recoverable Disclosure amount Initiative is the higher of an asset’s or cash
generating The amendments units (CGU) require fair entities value to less provide costs disclosure of disposal of changes and its in value their in liabilities use. It arising determined from financing for individual activities, asset, including unless both the changes asset does arising not from generate cash cash flows inflows and non-cash that are largely changes independent (such as of foreign those
from exchange other gains assets or or losses). groups The of assets. amendments Where have the carrying no effect amount on the of Group’s an asset consolidated or CGU exceeds financial its
position recoverable and amount, the consolidated the asset statement is considered of cash impaired flows 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 to IAS that 12 reflects Income current Taxes: market Recognition assessments of Deferred of the Tax time Assets value for of Unrealized money and Losses the risks
Amendments
The specific amendments to the asset. clarify In determining that an entity fair needs value to less consider costs of whether disposal, tax recent law restricts market the transactions sources of are taxable taken
profits into account. against If which no such it may transactions make deductions can be identified, on the reversal an appropriate of deductible valuation temporary model difference is used. related to
unrealized Impairment losses. of Furthermore, continuing operations the amendments are recognized provide guidance in the consolidated how an statement entity should of profit determine or loss
future in those taxable expense profits categories and explain consistent the circumstances with the function in which of the taxable impaired profit asset, may include except the for recovery a property of
some previously assets revalued for more where than their carrying revaluation amount. 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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