b'STAATSOLIE MAATSCHAPPIJ SURINAME N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 (Continued)Recoverability of assetsDefined benefit plans (pension benefits)TheGroupassesseseachassetorcash Thecostofdefinedbenefitpensionplansandothergeneratingunit(CGU)(excludinggoodwill,which post-employmentmedicalbenefitsandthepresentis assessed annually regardless of indicators)value of the pension obligation are determined in each reporting period to determine whetherusing actuarial valuations. An actuarial valuation anyindicationofimpairmentexists.Wherean involves making various assumptions which may indicatorofimpairmentexists,aformalestimate differfromactualdevelopmentsinthefuture.Theseoftherecoverableamountismade,whichis includethedeterminationofthediscountrate,considered to be the higher of the fair valuefuturesalaryincreases,mortalityratesandfuturelesscostofdisposal(FVLCD)andvalue-in- pension increases. Due to the complexity of the use(VIU).Theassessmentsrequiretheuseof valuation,theunderlyingassumptionsanditslong-estimatesandassumptionssuchaslong-termoil termnature,adefinedbenefitobligationishighlyprices(consideringcurrentandhistoricalprices, sensitive to changes in these assumptions. All pricetrendsandrelatedfactors),discountrates, assumptions are reviewed at each reporting date.operatingcosts,futurecapitalrequirements,decommissioningcosts,explorationpotential, Theparametermostsubjecttochangeisthereserves and operating performance (whichdiscount rate. In determining the appropriate includesproductionandsalesvolumes).These discountrate,managementconsiderstheinterestestimatesandassumptionsaresubjecttorisk rates of government bonds in currencies consistent anduncertainty.Therefore,thereisapossibility withthecurrenciesofthepost-employmentbenefitthat changes in circumstances will impact theseobligationwithatleastanAAratingorabove,projections,whichmayimpacttherecoverable as set by an internationally acknowledged rating amountofassetsand/orCGUs. agency,andextrapolatedasneededalongtheyield curve to correspond with the expected term Units of production (UOP) depreciation of oilofthedefinedbenefitobligation.Theunderlyingassetsbondsarefurtherreviewedforquality.ThoseOil properties are depreciated using UOP methodhaving excessive credit spreads are removed from over total proved developed and undevelopedthe analysis of bonds on which the discount rate is hydrocarbonreserves.Thisresultsina based,onthebasisthattheydonotrepresenthighdepreciation/amortizationchargeproportionaltothe qualitybonds.depletion of the anticipated remaining productionThemortalityrateisbasedonpubliclyavailablefromthefield. mortalitytablesforthespecificcountries.ThoseThelifeofeachitem,whichisassessedatleast mortality tables tend to change only at intervals in annually,relatestobothitsphysicallifelimitations response to demographic changes. Future salary and present assessments of economicallyincreases and pension increases are based on recoverablereservesofthefieldatwhichthe expectedfutureinflationratesfortherespectiveassetislocated.Thesecalculationsrequirethe countries. Further details about pension obligations useofestimatesandassumptions,includingthe areprovidedinNote4.8.amount of recoverable reserves and estimatesHydrocarbon reserve and resource estimatesoffuturecapitalexpenditure.ThecalculationoftheUOPrateofdepreciation/amortizationwillbe Hydrocarbon reserves are estimates of the amount impacted to the extent that actual production in theof hydrocarbons that can be economically and future is different from current forecast productionlegallyextractedfromtheGroupsoilproperties.basedontotalprovedreserves,orfuturecapital TheGroupestimatesitscommercialreservesexpenditure estimates change. Changes to proveand resources based on information compiled reserves could arise due to changes in the factorsbyappropriatelyqualifiedpersonsrelatingtotheorassumptionsusedinestimatingreserves, geologicalandtechnicaldataonthesize,depth,including: shape and grade of the hydrocarbon body and suitableproductiontechniquesandrecoveryTheeffectonprovedreservesofdifferences rates. Commercial reserves are determined between actual commodity prices and commodityusingestimatesofoilinplace,recoveryfactorsprice assumptions andfuturecommodityprices,thelatterhavinganUnforeseen operational issues impact on the total amount of recoverable reserves and the proportion of the gross reserves that are attributable to the host government under the terms oftheproduction-sharingagreements(PSAs).Future development costs are estimated using 52 STAATSOLIE 2018 ANNUAL REPORT'