b'STAATSOLIE MAATSCHAPPIJ SURINAME N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 (Continued)Estimates and assumptions Decommissioning liabilityThekeyassumptionsconcerningthefutureand Decommissioning costs will be incurred by the other key sources of estimation uncertainty atGroup at the end of the operating life of some of thereportingdate,thathaveasignificantriskof theGroupsfacilitiesandproperties.TheGroupcausingamaterialadjustmenttothecarrying assesses its decommissioning provision at each amounts of assets and liabilities within thereportingdate.Theultimatedecommissioningnextfinancialyear,aredescribedbelow.The costs are uncertain and cost estimates can vary Group based its assumptions and estimates oninresponsetomanyfactors,includingchangesparameters available when the consolidatedtorelevantlegalrequirements,estimatesofthefinancialstatementswereprepared.Existing extentandcostsofdecommissioningactivities,circumstances and assumptions about futuretheemergenceofnewrestorationtechniquesordevelopments,however,maychangedueto experienceatotherproductionsites,costincreasesmarket changes or circumstances arising beyondascomparedtotheinflationratesof2.5%(2017:the control of the Group. Such changes are2.5%),andchangesindiscountratesof10.28%reflectedintheassumptionswhentheyoccur. (2017:8.38%).Theexpectedtiming,extentandamountofexpendituremayalsochange,forFunctional currencyexample,inresponsetochangesinoilandgasThefunctionalcurrencyfortheparententityand reserves or changes in laws and regulations or eachofitssubsidiaries,isthecurrencyofthe theirinterpretation.Therefore,significantestimatesprimary economic environment in which the entityand assumptions are made in determining the operates.ThefunctionalcurrencyforGOw2is provisionfordecommissioning.Asaresult,thereSurinamesedollar(SRD).Thefunctionalcurrency couldbesignificantadjustmentstotheprovisionsofStaatsolie,SPCSandVentrinistheUSdollar establishedwhichwouldaffectfuturefinancial(US$). Determination of functional currency mayresults.Theprovisionatreportingdaterepresentsinvolvecertainjudgementstoidentifytheprimary managementsbestestimateofthepresentvalueeconomic environment and the parent entityofthefuturedecommissioningcostsrequired.reconsiders the functional currency of its entities ifEnvironmental risk liabilitythere is a change in events and conditions which determined the primary economic environment. Liabilitiesforenvironmentalcostsarerecognizedwhenaclean-upisprobable,andtheassociatedProvision for expected credit losses of tradecostscanbereliablyestimated.Generally,thereceivablestiming of recognition of these provisions coincides TheGroupusesaprovisionmatrixtocalculate withthecommitmenttoaformalplanofactionor,ifECLsfortradereceivables.Theprovisionmatrixis earlier,ondivestmentoronclosureofinactivesites.based on its historical observed default rates overTheamountrecognizedisthebestestimateofthethe expected life of the trade receivables and isexpenditurerequired.Iftheeffectofthetimevalueadjustedforforward-lookingestimates. ofmoneyismaterial,theamountrecognizedisthepresent value of the estimated future expenditure.ThedefaultratefortheGroupisdeterminedas Contingent liabilitiesanaverageofthewrite-offscomparedtotheoutstanding trade receivables balances using aContingent liabilities may arise from the ordinary windowofafewyears.Thisdefaultrateisthen course of business in relation to claims against determinedperagebracketbyadjustingtherateto theGroup,includinglegal,contractualandotheralign with the variation in the provision percentagesclaims.Bytheirnature,contingencieswillbeper age bracket. For credit balances no ECL isresolved only when one or more uncertain future considered.eventsoccurorfailtooccur.TheassessmentoftheTheGroupexpectsthesamepatternforthe existence,andpotentialquantum,ofcontingenciesfuture,thereforeforward-lookingestimatesarenot inherentlyinvolvestheexerciseofsignificantconsidered to have an impact on the default rate.judgmentandtheuseofestimatesregardingtheoutcome of future events.At every reporting date the historical observed default rate will be updated and changes in the forward-lookingestimateswillbeanalyzed.51'