Finanstilsynet has reviewed certain aspects of the 2014 financial statements of BW Offshore Limited ("BWO"). The review has primarily focused on the company's method for depreciating vessels classified as conversion candidates.
In 2014 BWO revised the depreciation method used for certain categories of assets in vessels defined as conversion candidates. Conversion candidates are vessels that have been demobilised from prior fields, are warm stacked, and are actively being marketed for redeployment. BWO argued that the consumption of future economic benefits embodied in these assets during the redeployment period is negligible, and therefore temporarily stopped depreciating such assets.
Finanstilsynet's assessment is that the depreciation method used is not in compliance with the accounting legislation. BWO has acknowledged that there is some consumption of economic benefit also in periods of inactivity, and will adjust depreciations going forward to reflect this.
Please direct any queries to:
Christian Falkenberg Kjøde, Head of section, +47 22 93 99 46, mobile: +47 90 94 79 14.