b'STAATSOLIE MAATSCHAPPIJ SURINAME N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 (Continued)productproducedwhiletesting.Wherethese Anitemofproperty,plantandequipmentandanyproceedsexceedthecostoftesting,anyexcessis significantpartinitiallyrecognizedisderecognizedrecognizedintheconsolidatedstatementofprofit upon disposal or when no future economic or loss. benefitsareexpectedfromitsuseordisposal.Whenadevelopmentprojectmovesintothe Any gain or loss arising on derecognition of the productionstage,allassetsincludedinAssets asset (calculated as the difference between the net underconstructionarethentransferredto disposal proceeds and the carrying amount of the Producingassetswhichisalsoasub-category asset) is included in the consolidated statement of ofOilproperties.Thecapitalizationofcertain profitorlosswhentheassetisderecognized.construction/developmentcostsceases,and Theassetsresidualvalues,usefullivesandcosts are either regarded as part of the cost ofmethodsofdepreciation/amortizationareinventoryorexpensed,exceptforcostswhich reviewedateachreportingperiodandadjustedqualifyforcapitalizationrelatingtoOilandgas prospectively,ifappropriate.propertiesassetadditions,improvementsornewdevelopments. (iii)Majormaintenance,refits,inspectionandrepairsOil propertiesproducing assets and other property, plant and equipment Expenditureonmajormaintenancerefits,inspections or repairs comprises the cost of (i) Initial recognition replacementassetsorpartsofassets,inspectionOilandgaspropertiesandOtherproperty, costsandoverhaulcosts.Whereanasset,orpartplantandequipmentarestatedatcost,less of an asset that was separately depreciated and accumulated depreciation and accumulatedisnowwrittenoff,isreplacedanditisprobableimpairment losses. thatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheGroup,theexpenditureTheinitialcostofanassetcomprisesitspurchase iscapitalized.Wherepartoftheassetreplacedprice or construction cost (if the asset waswas not separately considered as a component previouslyclassifiedasassetsindevelopment), andthereforenotdepreciatedseparately,theany costs directly attributable to bringing thereplacement value is used to estimate the assetintooperation,theinitialestimateofthe carrying amount of the replaced asset(s) and decommissioningobligationand,forqualifying is immediately written off. Inspection costs assets(whererelevant),borrowingcosts. associatedwithmajormaintenanceprogramsareThepurchasepriceorconstructioncostisthe capitalizedandamortizedovertheperiodtotheaggregate amount paid and the fair value of anynextinspection.Allotherday-to-dayrepairsandotherconsiderationgiventoacquiretheasset. maintenance costs are expensed as incurred.(ii) Depreciation/amortization Refinery, power plant and other fixed assetsOilpropertiesaredepreciated/amortizedonaUOP Therefinery,powerplantandotherfixedassetsbasis over the total proved developed reserves ofarevaluedatcost.Thecapitalizedcostsofthesethefieldconcerned.TheUOPratecalculationfor assetsaredepreciatedonastraight-linebasis,thedepreciation/amortizationoffielddevelopment taking into account the estimated useful lifetime of costs takes into account expenditures incurred tothesignificantcomponentsoftherefinery.date,togetherwithsanctionedfuturedevelopment Projects in progressexpenditure.Otherproperty,plantandequipmentaregenerally Projectsinprogressrelatestoworkinprogress,depreciatedonastraight-linebasisovertheir for which at the date of completion the cost is estimatedusefullives,whichisgenerally25 capitalizedtotheappropriatecategoryofpropertyyearsfortherefinery,andmajorinspectioncosts plantandequipment.Projectinprogressisnotareamortizedoverthreetofiveyears,which depreciated.represents the estimated period before the next plannedmajorinspection.42 STAATSOLIE 2018 ANNUAL REPORT'