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Russia's oil giant Rosneft reassesses currency risks

February 03, 2015, 11:27 UTC+3
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LONDON, February 3. /TASS/. Rosneft, a Russian oil producer, has reassessed currency risks due to ruble volatility, according to the company.

"Starting October 1, 2014, Rosneft adopted IFRS hedge accounting to increase recognition and measurement accuracy of foreign currency influence in the consolidated financial statement of the company," the company reported.

To prepare the consolidated financial statement, the company "is converting credits and loans denominated in foreign currency, into Russian rubles using exchange rates as at the end of the accounting period. "All exchange rate differences on credits and loans before October 1, 2014 denominated in foreign currency have been reflected in the profit and loss account in the IFRS statement", according to the company.

Rosneft gains revenue in foreign currency and attracts financing in dollars, which is a risk insurance measure. "After the operation has been hedged and the revenue stated, the exchange rate differences are temporarily reflected in the capital and will be further stated in the period account. Consequently, we will have a more uniform reflection of credits and loans currency effects in the future revenue. As a result, the company acknowledges a real threat for the currency it is being influenced in," the company said.

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