Change in functional currency to USD and Q4 2014 impairment
Following the acquisition of Marathon Oil Norge AS, Det norske oljeselskap ASA’s («DETNOR») functional currency is assessed to be U.S. Dollars (USD).
The change in functional currency from Norwegian Kroner (NOK) will have effect from October 15, 2014, which was the closing date for the acquisition of Marathon Oil Norge AS. The upcoming Q4 2014 financials to be released on February 25, 2015 will thus be reported in USD. The balance sheet has been converted to USD at a rate of 6.6161 per October 15, 2014.
As part of the purchase price allocation for the acquisition of Marathon Oil Norge AS, Det norske oljeselskap recognized regular goodwill of approximately USD 300 million and technical goodwill of approximately USD 1,200 million as per the accounting requirements for financial reporting purposes under IFRS 3. In the fourth quarter 2014 financials, Det norske will incur a non-cash net impairment charge in the range of USD 320-340 million (pre- and post tax – unaudited), consisting mainly of technical goodwill.