b'STAATSOLIE MAATSCHAPPIJ SURINAME N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 (Continued)andrewardsofownership.Whenithasneither However,incertaincases,theGroupmayalsotransferred nor retained substantially all the risksconsiderafinancialassettobeindefaultwhenandrewardsoftheasset,nortransferredcontrol internal or external information indicates that oftheasset,theGroupcontinuestorecognizethe the Group is unlikely to receive the outstanding transferred asset to the extent of its continuingcontractualamountsinfull,beforeconsideringanyinvolvement.Inthatcase,theGroupalso creditenhancementsheldbytheGroup.Afinancialrecognizesanassociatedliability.Thetransferred asset is written off when there is no reasonable asset and the associated liability are measured onexpectation of recovering the contractual cash abasisthatreflectstherightsandobligationsthat flows.the Group has retained. (ii) Financial liabilitiesContinuing involvement that takes the form of a guarantee over the transferred asset is measuredInitial recognition and measurement at the lower of the original carrying amount of theFinancialliabilitiesareclassified,atinitialasset and the maximum amount of considerationrecognition,asfinancialliabilitiesatfairvaluethattheGroupcouldberequiredtorepay. throughprofitorloss,loansandborrowingsandImpairmentoffinancialassets payables.Further disclosures if applicable and relating toAllfinancialliabilitiesarerecognizedinitiallyatfairimpairmentoffinancialassetsarediscussedin valueand,inthecaseofloansandborrowingsandrespectivedisclosuresforsignificantassumptions payables,netofdirectlyattributabletransactionandtradereceivables,includingcontractassets. costs.TheGroupsfinancialliabilitiesincludetradeandotherpayables,loansandborrowingsTheGrouprecognizesanallowanceforexpected including bank overdrafts.credit losses (ECLs) for all debt instruments not heldatfairvaluethroughprofitorloss.ECLsare Subsequent measurement based on the difference between the contractualThemeasurementoffinancialliabilitiesdependscashflowsdueinaccordancewiththecontract ontheirclassification,asdescribedbelow:andallthecashflowsthattheGroupexpectstoreceive,discountedatanapproximationofthe Financialliabilitiesatfairvaluethroughprofitorlossoriginaleffectiveinterestrate.Theexpectedcashflowswillincludecashflowsfromthesaleof Financialliabilitiesatfairvaluethroughprofitorcollateral held or other credit enhancements thatlossincludefinancialliabilitiesheldfortradingare integral to the contractual terms.andfinancialliabilitiesdesignateduponinitialECLsarerecognizedintwostages.Forcredit recognitionasatfairvaluethroughprofitorloss.exposures for which there has not been aFinancialliabilitiesareclassifiedasheldfortradingsignificantincreaseincreditrisksinceinitial if they are incurred for the purpose of repurchasing recognition,ECLsareprovidedforcreditlosses inthenearterm.Thiscategoryincludesshort-termthat result from default events that are possibleinvestmentsoftheGroupinlocallylistedequitywithinthenext12-months(a12-monthECL).For securities of local companies.those credit exposures for which there has been asignificantincreaseincreditrisksinceinitial Gains or losses on liabilities held for trading are recognition,alossallowanceisrequiredforcredit recognizedinthestatementofprofitorloss.losses expected over the remaining life of the exposure,irrespectiveofthetimingofthedefault Financial liabilities designated upon initial (a lifetime ECL).recognitionatfairvaluethroughprofitorlossaredesignatedattheinitialdateofrecognition,andFortradereceivablesandcontractassets,the onlyifthecriteriainIFRS9aresatisfied.TheGroupappliesasimplifiedapproachincalculating GrouphasnotdesignatedanyfinancialliabilityasECLs.Therefore,theGroupdoesnottrack atfairvaluethroughprofitorloss.changesincreditrisk,butinsteadrecognizesaloss allowance based on lifetime ECLs at eachLoans and borrowingsreportingdate.TheGrouphasestablisheda ThisisthecategorymostrelevanttotheGroup.provision matrix that is based on its historical creditAfterinitialrecognition,interestbearingloanslossexperience,adjustedforforward-looking andborrowingsaresubsequentlymeasuredatfactorsspecifictothedebtorsandtheeconomic amortizedcostusingtheEIRmethod.Gainsenvironment.andlossesarerecognizedintheconsolidatedTheGroupconsidersafinancialassetindefault statementofprofitorlosswhentheliabilitieswhencontractualpaymentsare90dayspastdue. arederecognizedaswellasthroughtheEIR46 STAATSOLIE 2018 ANNUAL REPORT'