A. Accounting Framework
The consolidated financial statements of the Company have been prepared in accordance with, and comply with International Financial Reporting Standards (’IFRS’) and interpretations adopted by the European Union, where effective, for financial years beginning January 1, 2020 and also comply with the financial reporting requirements included in Part 9 of Book 2 of the Dutch Civil Code.
The Company financial statements included in section 4.4 are part of the 2020 financial statements of SBM Offshore N.V.
NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS APPLICABLE AS OF JANUARY 1, 2020
The Company has adopted the following new standards as of January 1, 2020:
- Amendments to IFRS 3 − ’Definition of a Business’;
- Amendments to IFRS 7, IFRS 9 and IAS 39 − ’Interest Rate Benchmark Reform’;
- Amendments to IAS 1 and IAS 8 − ’Definition of Material’;
- Amendment to IFRS 16 Leases − ’COVID-19-Related Rent Concessions’; and
- Revised Conceptual Framework for Financial Reporting.
IFRS 3 – Definition of a Business
The amendment to IFRS 3 clarifies that to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. Furthermore, it clarified that a business can exist without including all of the inputs and processes needed to create outputs.
The amendments had no impact on the consolidated financial statements of the Company for the year ended December 31, 2020.
IFRS 7, IFRS 9 and IAS 39 – Interest Rate Benchmark Reform
The amendments to IFRS 7 − Financial Instruments: Disclosures, IFRS 9 − Financial Instruments and IAS 39 − Financial Instruments: Recognition and Measurement provide a number of reliefs, which apply to all hedging relationships that are directly affected by interest rate benchmark reform. A hedging relationship is affected if the reform gives rise to uncertainties about the timing and or amount of benchmark-based cash flows of the hedged item or the hedging instrument.
The adoption of the amendments had no accounting impact on the financial statements for the year ended December 31, 2020.
IAS 1 and IAS 8 − Definition of Material
The amendments provide a new definition of material that states ’information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity’.
The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users.
These amendments had no impact on the consolidated financial statements for the year ended December 31, 2020.
IFRS 16 - COVID-19-Related Rent Concessions
The amendment to IFRS 16 permits lessees, as a practical expedient, not to assess whether particular rent concessions occurring as a direct consequence of the COVID-19 pandemic are lease modifications and instead to account for those rent concessions as if they are not lease modifications. The amendment does not affect lessors.
This amendment had no impact on the consolidated financial statements for the year ended December 31, 2020.
Revised Conceptual Framework for Financial Reporting
The Conceptual Framework is not a standard, and none of the concepts contained therein override the concepts or requirements in any standard. The purpose of the Conceptual Framework is to assist the International Accounting Standards Board (’IASB’) in developing standards, to help preparers develop consistent accounting policies where there is no applicable standard in place and to assist all parties to understand and interpret the standards.
The Revised Conceptual Framework includes some new concepts, provides updated definitions and recognition criteria for assets and liabilities and clarifies some important concepts. These amendments had no impact on the consolidated financial statements of the Company for the year ended December 31, 2020.
STANDARDS AND INTERPRETATIONS NOT MANDATORILY APPLICABLE TO THE COMPANY AS OF JANUARY 1, 2020
The following standards and amendments published by the IASB and endorsed by the European Union are not mandatorily applicable as of January 1, 2020:
- Amendments to IAS 1 − ’Presentation of Financial Statements: Classification of Liabilities as Current or Non-current’;
- Amendments to IFRS 3 − ’Reference to the Conceptual Framework for Financial Reporting’;
- Amendments to IAS 16 − ’Property, Plant and Equipment - Proceeds before Intended Use’;
- Amendments to IAS 37 − ’Onerous Contracts - Cost of Fulfilling a Contract’;
- Annual Improvements to IFRS Standards 2018-2020.
The Company does not expect a significant effect on the financial statements due to adoption of these amendments.
Other standards and amendments are not relevant to the Company.