b'STAATSOLIE MAATSCHAPPIJ SURINAME N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020 (Continued)Theforwardcontractisnotdesignatedashedge q. Impairment of non-financial assetsinstruments.TheGroupassessesateachreportingdatep. Inventorieswhether there is an indication that an asset Petroleumproductsarevaluedatthelowerofcost maybeimpaired.Ifanyindicationexists,orandnetrealizablevalue. when annual impairment testing for an asset isrequired,theGroupestimatestheassetsRawmaterials: recoverableamount.AnassetsrecoverableamountisthehigherofanassetsorcashCost is arrived at using the weighted averagegenerating units (CGU) fair value less costs of method. disposal and its value in use. It is determined foranindividualasset,unlesstheassetdoesFinishedgoodsandworkinprogress: notgeneratecashinflowsthatarelargelyindependent of those from other assets or groups Cost includes cost of direct materials and laborofassets.Wherethecarryingamountofanand a proportion of manufacturing overheadsassetorCGUexceedsitsrecoverableamount,based on normal operating capacity butthe asset is considered impaired and is written excluding borrowing costs. down to its recoverable amount. In assessing valueinuse,theestimatedfuturecashflowsInventories are stated at the lower of cost andare discounted to their present value using a netrealizablevalue.Netrealizablevalueisthe pre-taxdiscountratethatreflectscurrentmarketestimated selling price in the ordinary course ofassessments of the time value of money and business,lessestimatedcostsofcompletionand therisksspecifictotheasset.Indeterminingthe estimated costs to sell. fairvaluelesscostsofdisposal,recentmarketThecostofcrudeoilandrefinedproductsisthe transactions are taken into account. If no such purchasecost,thecostofrefining,includingthe transactionscanbeidentified,anappropriateappropriateproportionofdepreciation,depletion valuation model is used.andamortizationandoverheadsbasedonnormal Impairment losses of continuing operations are operatingcapacity,determinedonaweighted recognizedintheconsolidatedstatementofprofitaverage basis.or loss in those expense categories consistent Thenetrealizablevalueofcrudeoilandrefined withthefunctionoftheimpairedasset,exceptproducts is based on the estimated selling price infor a property previously revalued where the theordinarycourseofbusiness,lesstheestimated revaluationwastakentoOCI.Inthiscase,thecosts of completion and the estimated costsimpairmentisalsorecognizedinOCIuptothenecessary to make the sale. amount of any previous revaluation.Materialsandsuppliesarevaluedusingthe Goodwill is tested for impairment annually weighted average cost method. as at December 31 and when circumstances indicate that the carrying value may be impaired. Pipeline fill Impairment is determined for goodwill by assessing the recoverable amount of each Crudeoil,whichisnecessarytobringapipeline CGUtowhichthegoodwillrelates.Whereintoworkingorder,istreatedasapartofthe the recoverable amount of the CGU is less relatedpipeline.Thisisonthebasisthatitis thanitscarryingamount,animpairmentlossnot held for sale or consumed in a productionisrecognized.Impairmentlossesrelatingtoprocess but is necessary to the operation of agoodwill cannot be reversed in future periods.facilityduringmorethanoneoperatingcycle, r.Cash and shortterm deposits and its cost cannot be recouped through sale (orissignificantlyimpaired).Thisapplieseven Cash and short-term deposits in the consolidated if the part of inventory that is deemed to be anstatementoffinancialpositioncomprisecashatitemofproperty,plantandequipmentcannotbe banks and on hand and short-term deposits with separated physically from the rest of inventory.amaturityofthreemonthsorless,whichareIt is valued at cost and is depreciated over thesubjecttoaninsignificantriskofchangesinvalue.useful life of the related asset. For the purpose of the consolidated statement cashflows,cashandcashequivalentsconsistofcashandshort-termdepositsasdefinedabove,net of outstanding bank overdrafts as they are consideredanintegralpartoftheGroupscashmanagement. 68 STAATSOLIE 2020 ANNUAL REPORT'