b'STAATSOLIE MAATSCHAPPIJ SURINAME N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2021 (Continued)Derecognition ThecostofcrudeoilandrefinedproductsistheAfinancialliabilityisderecognizedwhenthe purchasecost,thecostofrefining,includingtheobligationundertheliabilityisdischargedor appropriateproportionofdepreciation,depletioncancelledorexpires.Whenanexistingfinancial andamortizationandoverheadsbasedonnormalliabilityisreplacedbyanotherfromthesame operatingcapacity,determinedonaweightedlenderonsubstantiallydifferentterms,ortheterms averagebasis.ofanexistingliabilityaresubstantiallymodified, Thenetrealizablevalueofcrudeoilandrefinedsuchanexchangeormodificationistreatedas productsisbasedontheestimatedsellingpriceinthederecognitionoftheoriginalliabilityandthe theordinarycourseofbusiness,lesstheestimatedrecognitionofanewliability.Thedifferenceinthe costs of completion and the estimated costs respectivecarryingamountsisrecognizedinthe necessarytomakethesale.consolidatedstatementofprofitorloss.Materialsandsuppliesarevaluedusingthe(iii) Offsetting of financial instrumentsweightedaveragecostmethod.Financialassetsandfinancialliabilitiesareoffset Pipeline filland the net amount is reported in the consolidated statementoffinancialpositionifthereisacurrently Crudeoil,whichisnecessarytobringapipelineenforceablelegalrighttooffsettherecognized intoworkingorder,istreatedasapartoftheamounts and there is an intention to settle on a netrelatedpipeline.Thisisonthebasisthatitisbasis,torealizetheassetsandsettletheliabilities not held for sale or consumed in a production simultaneously. processbutisnecessarytotheoperationofafacilityduringmorethanoneoperatingcycle,p. Derivative Financial instrumentsanditscostcannotberecoupedthroughsaleTheGroupentersforwardcurrencycontractsto (orissignificantlyimpaired).Thisappliesevenmanage its foreign currency exposures.ifthepartofinventorythatisdeemedtobeanitemofproperty,plantandequipmentcannotbeTherelatedderivativeinstrumentisinitially separatedphysicallyfromtherestofinventory.recordedatfairvalueonthedateonwhichthe Itisvaluedatcostandisdepreciatedoverthecontractisenteredintoandaresubsequently useful life of the related asset.remeasuredatfairvalue.Thederivativesare r.Impairment of non-financial assetscarriedasfinancialassetswhenthefairvalueispositiveandasfinancialliabilitieswhenthefair TheGroupassessesateachreportingdatevalueisnegative. whether there is an indication that an asset Theforwardcontractisnotdesignatedashedge maybeimpaired.Ifanyindicationexists,orinstruments. when annual impairment testing for an asset isrequired,theGroupestimatestheassetsq. Inventoriesrecoverableamount.AnassetsrecoverableamountisthehigherofanassetsorcashPetroleumproductsarevaluedatthelowerofcost generatingunits(CGU)fairvaluelesscostsofandnetrealizablevalue. disposalanditsvalueinuse.Itisdeterminedforanindividualasset,unlesstheassetdoesRawmaterials: notgeneratecashinflowsthatarelargelyindependent of those from other assets or groups Costisarrivedatusingtheweightedaverage ofassets.Wherethecarryingamountofanmethod. assetorCGUexceedsitsrecoverableamount,the asset is considered impaired and is written Finishedgoodsandworkinprogress: downtoitsrecoverableamount.InassessingCostincludescostofdirectmaterialsandlabor valueinuse,theestimatedfuturecashflowsandaproportionofmanufacturingoverheads arediscountedtotheirpresentvalueusingabasedonnormaloperatingcapacitybut pre-taxdiscountratethatreflectscurrentmarketexcludingborrowingcosts. assessmentsofthetimevalueofmoneyandtherisksspecifictotheasset.IndeterminingInventoriesarestatedatthelowerofcostand fairvaluelesscostsofdisposal,recentmarketnetrealizablevalue.Netrealizablevalueisthe transactionsaretakenintoaccount.Ifnosuchestimated selling price in the ordinary course oftransactionscanbeidentified,anappropriatebusiness,lessestimatedcostsofcompletionand valuationmodelisused.the estimated costs to sell.88 STAATSOLIE 2021 ANNUAL REPORT'