b'STAATSOLIE MAATSCHAPPIJ SURINAME N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020 (Continued)Allsuchcapitalizedcostsaresubjecttotechnical, phase to the extent that it is considered integral to commercialandmanagementreview,aswellas the development of the asset. Any costs incurred review for indicators of impairment at least oncein testing the assets to determine whether they ayear.Thisistoconfirmthecontinuedintent arefunctioningasintended,arecapitalized,to develop or otherwise extract value from thenet of any proceeds received from selling any discovery.Whenthisisnolongerthecase,the productproducedwhiletesting.Wherethesecosts are written off through the consolidatedproceedsexceedthecostoftesting,anyexcessisstatementofprofitorloss. recognizedintheconsolidatedstatementofprofitWhenprovedreservesofoilareidentifiedand or loss.developmentissanctionedbymanagement,the Whenadevelopmentprojectmovesintotherelevantcapitalizedexpenditureisfirstassessed productionstage,allassetsincludedinAssetsforimpairmentand(ifrequired)anyimpairment underconstructionarethentransferredtolossisrecognized,thentheremainingbalanceis Producingassetswhichisalsoasub-categorytransferred to oil properties.ofOilproperties.ThecapitalizationofcertainOtherthanlicensecosts,noamortizationischarged construction/developmentcostsceases,andduring the exploration and evaluation phase. costs are either regarded as part of the cost of inventoryorexpensed,exceptforcostswhichOil properties qualifyforcapitalizationrelatingtoOilandgaspropertiesassetadditions,improvementsornewThecostsofproductiondevelopmentsuchas developments.drilling,testingandcompletionofdevelopment Oil propertiesproducing assets and other wellsarecapitalized,notwithstandingifthesewells property, plant and equipmentaresuccessfulornot.Capitalizedcostsconsistofthepurchasepriceofmaterialsandservices, (i) Initial recognitionincludingtheGroupsinternalservices.Capitalizedcostsforwells,equipmentandproductionfacilities OilandgaspropertiesandOtherproperty,are depreciated using the units of productionplantandequipmentarestatedatcost,less(UOP)method. accumulated depreciation and accumulated Allcostsfordevelopmentwells,relatedplant impairment losses.andequipment,andrelatedAssetRetirement TheinitialcostofanassetcomprisesitspurchaseObligation(ARO)arecapitalized.Capitalizedcosts price or construction cost (if the asset was relatingtoinvestmentsintheoilfield,including previouslyclassifiedasassetsindevelopment),productivelandproperties,aredepreciatedbased any costs directly attributable to bringing the ontheUOPmethod,generallybyindividualfield, assetintooperation,theinitialestimateoftheas the proved developed reserves are produced.decommissioningobligationand,forqualifyingTheUOPfactorisderivedfromtheyearoil assets(whererelevant),borrowingcosts.production and the related proved developed oilThepurchasepriceorconstructioncostisthereserves. aggregate amount paid and the fair value of any otherconsiderationgiventoacquiretheasset.Oil propertiesassets under constructionExpenditureistransferredfromExplorationand (ii) Depreciation/amortizationevaluationassetstoAssetsunderconstruction Oilpropertiesaredepreciated/amortizedonaUOPwhichisasubcategoryofOilandgasproperties basis over the total proved developed reserves of once the work completed to date supportsthefieldconcerned.TheUOPratecalculationforthe future development of the asset and suchthedepreciation/amortizationoffielddevelopmentdevelopment receives appropriate approvals. Aftercosts takes into account expenditures incurred to transferoftheexplorationandevaluationassets, date,togetherwithsanctionedfuturedevelopmentallsubsequentexpenditureontheconstruction, expenditure.installation or completion of infrastructure facilities such as pipelines and the drilling of developmentOtherproperty,plantandequipmentaregenerallywells,includingunsuccessfuldevelopment depreciated on a straight-line basis over their ordelineationwells,iscapitalizedwithinoil estimatedusefullives,whichisgenerally25properties. yearsfortherefinery,andmajorinspectioncostsareamortizedoverthreetofiveyears,whichDevelopment expenditure is net of proceeds fromrepresents the estimated period before the next the sale of oil produced during the developmentplannedmajorinspection.63'