BP 2010 Annual Report Download - page 167

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Notesonnancialstatements
Financial statements
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5.Disposalsandimpairmentcontinued
ReningandMarketing
In2010,gainsresultedfromourdisposalsoftheFrenchretailfuelsandconveniencebusinesstoDelekEurope,thefuelsmarketingbusinessinBotswana
toPumaEnergy,certainnon-strategicpipelinesandterminalsintheUS,ourinterestsinethyleneandpolyethyleneproductioninMalaysiatoPetronasand
ourinterestinafuturesexchange.Lossesresultedfromthedisposalofanumberofassetsinthesegmentportfolio.
In2009,gainsondisposalmainlyresultedfromthedisposalofourgroundfuelsmarketingbusinessinGreeceandretailchurnintheUS,Europe
andAustralasia.Lossesresultedfromthecontinueddisposalofcompany-ownedandcompany-operatedretailsitesintheUS,retailchurnanddisposalsof
assetselsewhereinthesegmentportfolio.Retailchurnistheoverallprocessofacquiringanddisposingofretailsitesbywhichthegroupaimstoimprove
thequalityandmixofitsportfolioofservicestations.
In2008,themajortransactionsresultingingainswerethecontributionofourToledorenerytoaUSjointlycontrolledentityinanexchange
transactionwithHuskyEnergyandthedisposalsofourinterestintheDixiePipelineandcertainretailassetsintheUS.Thelossesonsalerelatedmainly
tothedisposalofretailassetsintheUSandEurope.Inaddition,certainassetsatourAcetylsplantinHull,UK,andotherinterestsintheUKandEurope
weresold.
Otherbusinessesandcorporate
In2010,wedisposedofour35%interestinK-Power,agas-redpowerassetinSouthKorea,andcontributedourCedarCreek2windenergydevelopment
assetinexchangefora50%equityinterestinajointlycontrolledentity,CedarCreekIIHoldingsLLC(CedarCreek2)andcash.Inaddition,therewasa
returnofcapitalinthejointlycontrolledentitiesFowlerIIHoldingsLLCandCedarCreekIIHoldingsLLCwhichdidnotchangeourpercentageinterestin
eitherentity.
During2009,wedisposedofourwindenergybusinessinIndiaandcontributedourFowler2windenergydevelopmentassetinexchangefora
50%equityinterestinajointlycontrolledentity,FowlerIIHoldingsLLC.Inaddition,therewasareturnofcapitalinthejointlycontrolledentityFowlerRidge
WindFarmLLCwhichdidnotchangeourpercentageinterestintheentity.
Summarizednancialinformationrelatingtothesaleofbusinessesisshowninthetablebelow.Informationrelatingtosalesofxedassetsisexcluded
fromthetable.
 
 $million
 2010 2009 2008
Non-currentassets      2,319 536 759
Currentassets      310 444 485
Non-currentliabilities      (303) (146) –
Currentliabilities      (124) (152) (134)
Totalcarryingamountofnetassetsdisposed      2,202 682 1,110
Recyclingofforeignexchangeondisposal      (52) (27) –
Costsondisposal      18 3 7
 2,168 658 1,117
Protonsaleofbusinessesa      1,968 314 1,721
Totalconsideration      4,136 972 2,838
Fairvalueofinterestreceivedinajointlycontrolledentity      – – (2,838)
Considerationreceived(receivable)b      20 (6) 11
Proceedsfromthesaleofbusinessesrelatedtocompletedtransactions     4,156 966 11
Depositsreceivedrelatedtoassetsclassiedasheldforsale     5,306 – –
Proceedsfromthesaleofbusinessesc      9,462 966 11
 
a
Ofwhich$929milliongainwasnotrecognizedintheincomestatementin2008asitrepresentedanunrealizedgainonthetransferoftheToledoreneryintoajointlycontrolledentity.
b
Considerationreceivedfromprioryearbusinessdisposalsornotyetreceivedfromcurrentyeardisposals.
c
Netofcashandcashequivalentsdisposedof$55million(2009$91millionand2008nil).
Impairment
Inassessingwhetherawrite-downisrequiredinthecarryingvalueofapotentiallyimpairedintangibleasset,itemofproperty,plantandequipmentoran
equity-accountedinvestment,theasset’scarryingvalueiscomparedwithitsrecoverableamount.Therecoverableamountisthehigheroftheasset’sfair
valuelesscoststosellandvalueinuse.Unlessindicatedotherwise,therecoverableamountusedinassessingtheimpairmentchargesdescribedbelowis
valueinuse.Thegroupestimatesvalueinuseusingadiscountedcashowmodel.Thefuturecashowsareadjustedforrisksspecictotheassetand
arediscountedusingapre-taxdiscountrate.Thisdiscountrateisderivedfromthegroup’spost-taxweightedaveragecostofcapitalandisadjustedwhere
applicabletotakeintoaccountanyspecicrisksrelatingtothecountrywherethecash-generatingunitislocated,althoughotherratesmaybeusedif
appropriatetothespeciccircumstances.In2010theratesusedrangedfrom11-14%(20099-13%).Therateappliedineachcountryisre-assessedeach
year.Incertaincircumstancesanimpairmentassessmentmaybecarriedoutusingfairvaluelesscoststosellastherecoverableamountwhen,for
example,arecentmarkettransactionforasimilarassethastakenplace.Forimpairmentsofavailable-for-salenancialassetsthatarequotedinvestments,
thefairvalueisdeterminedbyreferencetobidpricesatthecloseofbusinessatthebalancesheetdate.Anycumulativelosspreviouslyrecognizedinother
comprehensiveincomeistransferredtotheincomestatement.
BPAnnualReportandForm20-F2010 165