b'STAATSOLIE MAATSCHAPPIJ SURINAME N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2021 (Continued)Generally,theGroupprovidesshort-termadvances Provision for expected credit losses of trade to its customers. Using the practical expedient inreceivables IFRS15,theGroupdoesnotadjustthepromisedamount of consideration for the effects of aTheGroupusesaprovisionmatrixtocalculatesignificantfinancingcomponentifitexpects,at ECLsfortradereceivables.Theprovisionmatrixiscontractinception,thattheperiodbetweenthe basedonitshistoricalobserveddefaultratesovertransferofthepromisedgoodorservicetothe theexpectedlifeofthetradereceivablesandiscustomer and when the customer pays for thatadjustedforforward-lookingestimates.goodorservicewillbeoneyearorless. ThedefaultratefortheGroupisdeterminedasTheGroupalsoreceiveslong-termadvancesfrom anaverageofthewrite-offscomparedtothecustomersforthesaleofoilproducts.However, outstandingtradereceivablesbalancesusingasince the timing of the transfer of these goods orwindowofafewyears.Thisdefaultrateisthenservicesisatdiscretionofthecustomer,thisisnot determinedperagebracketbyadjustingtheratetoconsideredasasignificantfinancingcomponent. alignwiththevariationintheprovisionpercentagesperagebracket.ForcreditbalancesnoECLisDeterminingmethodtoestimatevariable considered. considerationTheGroupexpectsthesamepatternfortheSomecontractsforthesaleofoilproductsgive future,thereforeforward-lookingestimatesarenotrisetoaconsiderationpayabletocustomers.In consideredtohaveanimpactonthedefaultrate.casetheGroupisnotabletosupplythecustomerwith oil products in the timeframe as agreed in theAteveryreportingdatethehistoricalobservedcontractandbeforeitsstockoutdate,theGroupis defaultratewillbeupdatedandchangesintheliableforthedifferencebetweenthepriceofathird forward-lookingestimateswillbeanalyzed.party for the related oil products and the price asDecommissioning liabilityagreedinthecontract.However,sincetheGrouphasnohistoryoffailingtodeliveroncontractual Decommissioningcostswillbeincurredbytheobligations,penaltiesarenotconsideredupon Group at the end of the operating life of some of determination of the transaction price. theGroupsfacilitiesandproperties.TheGroupEstimates and assumptions assessesitsdecommissioningprovisionateachreportingdate.TheultimatedecommissioningThekeyassumptionsconcerningthefutureand costsareuncertainandcostestimatescanvaryotherkeysourcesofestimationuncertaintyat inresponsetomanyfactors,includingchangesthereportingdate,thathaveasignificantriskof torelevantlegalrequirements,estimatesofthecausingamaterialadjustmenttothecarrying extentandcostsofdecommissioningactivities,amountsofassetsandliabilitieswithinthe theemergenceofnewrestorationtechniquesornextfinancialyear,aredescribedbelow.The experienceatotherproductionsites,costincreasesGroupbaseditsassumptionsandestimateson ascomparedtotheinflationratesof2.30%(2020:parametersavailablewhentheconsolidated 2.03%),andchangesindiscountratesof6.89%financialstatementswereprepared.Existing (2020:6.50%).Theexpectedtiming,extentandcircumstancesandassumptionsaboutfuture amountofexpendituremayalsochange,fordevelopments,however,maychangedueto example,inresponsetochangesinoilandgasmarketchangesorcircumstancesarisingbeyond reservesorchangesinlawsandregulationsorthe control of the Group. Such changes aretheirinterpretation.Therefore,significantestimatesreflectedintheassumptionswhentheyoccur. and assumptions are made in determining the provisionfordecommissioning.Asaresult,thereFunctional currencycouldbesignificantadjustmentstotheprovisionsThefunctionalcurrencyfortheparententityand establishedwhichwouldaffectfuturefinancialeachofitssubsidiaries,isthecurrencyofthe results.Theprovisionatreportingdaterepresentsprimaryeconomicenvironmentinwhichtheentity managementsbestestimateofthepresentvalueoperates.ThefunctionalcurrencyforGOw2is ofthefuturedecommissioningcostsrequired.Surinamesedollar(SRD).ThefunctionalcurrencyofStaatsolie,SPCSandVentrinistheUSdollar(US$).Determinationoffunctionalcurrencymayinvolvecertainjudgementstoidentifytheprimaryeconomicenvironmentandtheparententityreconsiders the functional currency of its entities if thereisachangeineventsandconditionswhichdeterminedtheprimaryeconomicenvironment.92 STAATSOLIE 2021 ANNUAL REPORT'