b'STAATSOLIE MAATSCHAPPIJ SURINAME N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019 (Continued)identifiablefromthesaleofoilproductstothe party for the related oil products and the price as customer,theseareconsideredhighlyinterrelated. agreedinthecontract.However,sincetheGroupIdentifying performance obligations in a bundledhasnohistoryoffailingtodeliveroncontractualsaleofoilproductsandequipmentrental obligations,penaltiesarenotconsideredupondetermination of the transaction price.TheGroupmakesequipmentavailabletothe Estimates and assumptionscustomersaspartofcontractswithcustomerswhenprovidingoilproducts.TheGroup Thekeyassumptionsconcerningthefutureanddetermined that the sale of oil products andother key sources of estimation uncertainty at equipmentrentalarenotcapableofbeing thereportingdate,thathaveasignificantriskofdistinct.Thesaleofoilproductsandequipment causingamaterialadjustmenttothecarryingrentalarehighlyinterrelated,becausetheGroup amountsofassetsandliabilitieswithinthewouldnotbeabletoselltheoilproductsifthe nextfinancialyear,aredescribedbelow.Thecustomerdeclinedequipmentrental. Group based its assumptions and estimates on Determiningthetimingofsatisfactionofsaleofoil parametersavailablewhentheconsolidatedproducts financialstatementswereprepared.Existingcircumstances and assumptions about future TheGroupdeterminedthatforcontractsthat developments,however,maychangeduetoareconsideredconsignmentarrangements, market changes or circumstances arising beyond the obligation is to transfer the product to thethe control of the Group. Such changes are consignee.TheGroupwillnotrelinquishcontrol reflectedintheassumptionswhentheyoccur.of the consigned product until the product is soldFunctional currency totheend-customer.Consigneesdonothaveanyobligationtopayfortheproduct,otherthan Thefunctionalcurrencyfortheparententityandto pay the Group the agreed-upon portion of theeachofitssubsidiaries,isthecurrencyofthesale price once the consignee sells the productprimaryeconomicenvironmentinwhichtheentitytoathirdparty.Asaresult,forconsignment operates.ThefunctionalcurrencyforGOw2isarrangements,revenueisrecognizedwhenthe Surinamesedollar(SRD).Thefunctionalcurrencyproductsaredeliveredtotheendcustomerand ofStaatsolie,SPCSandVentrinistheUSdollartheperformanceobligationhasbeensatisfied. (US$).DeterminationoffunctionalcurrencymayConsiderationofsignificantfinancingcomponent involvecertainjudgementstoidentifytheprimaryin a contracteconomicenvironmentandtheparententityreconsiders the functional currency of its entities if Generally,theGroupprovidesshort-termadvances thereisachangeineventsandconditionswhichto its customers. Using the practical expedient indeterminedtheprimaryeconomicenvironment.IFRS15,theGroupdoesnotadjustthepromised Provision for expected credit losses of trade amount of consideration for the effects of areceivables significantfinancingcomponentifitexpects,atcontractinception,thattheperiodbetweenthe TheGroupusesaprovisionmatrixtocalculatetransferofthepromisedgoodorservicetothe ECLsfortradereceivables.Theprovisionmatrixiscustomerandwhenthecustomerpaysforthat basedonitshistoricalobserveddefaultratesovergoodorservicewillbeoneyearorless. theexpectedlifeofthetradereceivablesandisTheGroupalsoreceiveslong-termadvancesfrom adjustedforforward-lookingestimates.customersforthesaleofoilproducts.However, ThedefaultratefortheGroupisdeterminedassince the timing of the transfer of these goods oranaverageofthewrite-offscomparedtotheservicesisatdiscretionofthecustomer,thisisnot outstandingtradereceivablesbalancesusingaconsideredasasignificantfinancingcomponent. windowofafewyears.ThisdefaultrateisthenDeterminingmethodtoestimatevariable determinedperagebracketbyadjustingtheratetoconsideration alignwiththevariationintheprovisionpercentagesperagebracket.ForcreditbalancesnoECLisSomecontractsforthesaleofoilproductsgive considered. rise to a consideration payable to customers. InTheGroupexpectsthesamepatternforthecase the Group is not able to supply the customerfuture,thereforeforward-lookingestimatesarenotwithoilproductsinthetimeframeasagreedinthe consideredtohaveanimpactonthedefaultrate.contractandbeforeitsstockoutdate,theGroupisliableforthedifferencebetweenthepriceofathird56 STAATSOLIE 2019 ANNUAL REPORT'