b'STAATSOLIE MAATSCHAPPIJ SURINAME N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019 (Continued)Whenadevelopmentprojectmovesintothe Anitemofproperty,plantandequipmentandanyproductionstage,allassetsincludedinAssets significantpartinitiallyrecognizedisderecognizedunderconstructionarethentransferredto upondisposalorwhennofutureeconomicProducingassetswhichisalsoasub-category benefitsareexpectedfromitsuseordisposal.ofOilproperties.Thecapitalizationofcertain Any gain or loss arising on derecognition of the construction/developmentcostsceases,and asset(calculatedasthedifferencebetweenthenetcosts are either regarded as part of the cost ofdisposal proceeds and the carrying amount of the inventoryorexpensed,exceptforcostswhich asset) is included in the consolidated statement of qualifyforcapitalizationrelatingtoOilandgas profitorlosswhentheassetisderecognized.propertiesassetadditions,improvementsornewdevelopments. Theassetsresidualvalues,usefullivesandmethodsofdepreciation/amortizationareOil propertiesproducing assets and otherreviewedateachreportingperiodandadjustedproperty, plant and equipment prospectively,ifappropriate.(i) Initial recognition (iii) Major maintenance, refits, inspection and OilandgaspropertiesandOtherproperty, repairsplantandequipmentarestatedatcost,less Expenditureonmajormaintenancerefits,accumulated depreciation and accumulatedinspections or repairs comprises the cost of impairment losses. replacementassetsorpartsofassets,inspectionTheinitialcostofanassetcomprisesitspurchase costsandoverhaulcosts.Whereanasset,orpartpriceorconstructioncost(iftheassetwas ofanassetthatwasseparatelydepreciatedandpreviouslyclassifiedasassetsindevelopment), isnowwrittenoff,isreplacedanditisprobableany costs directly attributable to bringing thethatfutureeconomicbenefitsassociatedwithassetintooperation,theinitialestimateofthe theitemwillflowtotheGroup,theexpendituredecommissioningobligationand,forqualifying iscapitalized.Wherepartoftheassetreplacedassets(whererelevant),borrowingcosts. wasnotseparatelyconsideredasacomponentThepurchasepriceorconstructioncostisthe andthereforenotdepreciatedseparately,theaggregateamountpaidandthefairvalueofany replacementvalueisusedtoestimatetheotherconsiderationgiventoacquiretheasset. carrying amount of the replaced asset(s) and isimmediatelywrittenoff.Inspectioncosts(ii) Depreciation/amortization associatedwithmajormaintenanceprogramsarecapitalizedandamortizedovertheperiodtotheOilpropertiesaredepreciated/amortizedonaUOP next inspection. All other day-to-day repairs and basisoverthetotalproveddevelopedreservesof maintenance costs are expensed as incurred.thefieldconcerned.TheUOPratecalculationfor Refinery, power plant and other fixed assetsthedepreciation/amortizationoffielddevelopmentcosts takes into account expenditures incurred toTherefinery,powerplantandotherfixedassetsdate,togetherwithsanctionedfuturedevelopment arevaluedatcost.Thecapitalizedcostsoftheseexpenditure. assetsaredepreciatedonastraight-linebasis,Otherproperty,plantandequipmentaregenerally taking into account the estimated useful lifetime of depreciatedonastraight-linebasisovertheir thesignificantcomponentsoftherefinery.estimatedusefullives,whichisgenerally25 Projects in progressyearsfortherefinery,andmajorinspectioncostsareamortizedoverthreetofiveyears,which Projectsinprogressrelatestoworkinprogress,represents the estimated period before the nextforwhichatthedateofcompletionthecostisplannedmajorinspection. capitalizedtotheappropriatecategoryofpropertyplantandequipment.Projectinprogressisnotdepreciated.48 STAATSOLIE 2019 ANNUAL REPORT'