b'STAATSOLIE MAATSCHAPPIJ SURINAME N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019 (Continued)monthsinterestandprincipal,ifany,ispaidout. atthefieldlocation.WhentheliabilityisinitiallyAfterthenecessaryfundinghastakenplace, recognized,thepresentvalueoftheestimatedStaatsolie can obtain the remaining cash for itscostsiscapitalizedbyincreasingthecarryingoperations. amount of the related oil assets to the extent that itwasincurredbythedevelopment/constructionr.Cash dividendofthefield.AnydecommissioningobligationsTheGrouprecognizesaliabilitytomakecash thatarisethroughtheproductionofinventoryaredistributionstoownersofequitywhenthe expensedwhentheinventoryitemisrecognizeddistributionisauthorized,andthedistribution in cost of goods sold. Additional disturbances is no longer at the discretion of the Group. Awhichariseduetofurtherdevelopment/correspondingamountisrecognizeddirectlyin construction at the oil and gas property are equity. recognizedasadditionsorchargestothecorresponding assets and decommissioning s. Provisionsliabilitywhentheyoccur.Costsrelatedtorestorationofsitedamage(subsequenttostartGeneral of commercial production) that is created on an ongoingbasisduringproductionareprovidedProvisionsarerecognizedwhentheGroup forattheirnetpresentvaluesandrecognizedinhasapresentobligation(legalorconstructive) profitorlossasproductioncontinues.asaresultofapastevent,itisprobablethat Changes in the estimated timing or cost of anoutflowofresourcesembodyingeconomic decommissioningaredealtwithprospectivelybenefitswillberequiredtosettletheobligation byrecordinganadjustmenttotheprovisionand a reliable estimate can be made of theandacorrespondingadjustmenttooilandgasamount of the obligation.properties. Any reduction in the decommissioning Theexpenserelatingtoaprovisionispresented liabilityand,therefore,anydeductionfromintheconsolidatedstatementofprofitorloss theassettowhichitrelates,maynotexceednet of any reimbursement. If the effect of thethecarryingamountofthatasset.Ifitdoes,timevalueofmoneyismaterial,provisionsare anyexcessoverthecarryingvalueistakendiscounted using a current pre-tax rate thatimmediately to the consolidated statement of reflects,whenappropriate,therisksspecific profitorloss.totheliability.Whendiscountingisused,the If the change in estimate results in an increase increaseintheprovisionduetothepassage inthedecommissioningliabilityand,therefore,oftimeisrecognizedasafinancecostinthe anadditiontothecarryingvalueoftheasset,consolidatedstatementofprofitorloss. theGroupconsiderswhetherthisisanindicationWarranty provisions ofimpairmentoftheassetasawhole,andifso,testsforimpairment.If,formaturefields,TheGrouptypicallyprovideswarrantiesfor theestimatefortherevisedvalueofoilandguaranteeofquality,providingthecustomera gasassetsnetofdecommissioningprovisionstimeframeoffifteen(15)daysafterdeliveryto exceedstherecoverablevalue,thatportionoftheraise a claim in regard to shortages and defectincrease is charged directly to expense.inquality/quantityofdeliveredgoods.Provisionsrelatedtotheseassurance-typewarrantiesare Overtime,thediscountedliabilityisincreasedrecognizedwhentheproductissold,ortheservice forthechangeinpresentvaluebasedonisprovidedtothecustomer.Initialrecognitionis thediscountratethatreflectscurrentmarketbasedonhistoricalexperience.Theinitialestimate assessmentsandtherisksspecifictotheofwarrantyrelatedcostsisrevisedannually. liability.TheperiodicunwindingofthediscountisrecognizedintheconsolidatedstatementofprofitDecommissioning liability orlossasafinancecost.TheGrouprecognizesadecommissioningliability t. Pensions and other postemployment whereithasapresentlegalorconstructive benefits obligationasaresultofpastevents,anditisprobablethatanoutflowofresourceswillbe TheGroupoperatesdefinedbenefitpensionrequiredtosettletheobligation,andareliable plans.Re-measurements,comprisingofactuarialestimate of the amount of obligation can be made. gainsandlosses,theeffectoftheassetceiling(excluding amounts included in net interest on Theobligationgenerallyariseswhentheassetis thenetdefinedbenefitliability)andthereturninstalled,ortheground/environmentisdisturbed on plan assets (excluding amounts included 54 STAATSOLIE 2019 ANNUAL REPORT'