BP 2012 Annual Report Download - page 228

27. Other investments continued
Other non-current investments at 31 December 2012 include $585 million relating to life insurance policies. In the 2011 Annual Report and Form 20-F
the corresponding amount of $516 million was included in non-current prepayments. This amount has been reclassified to other non-current
investments in the balance sheet comparative figures shown in this Annual Report and Form 20-F. The life insurance policies have been designated as
financial assets at fair value through profit or loss and their valuation methodology is in level 3 of the fair value hierarchy. Fair value gains of $70 million
were recognized in the income statement (2011 $21 million and 2010 $58 million).
BP has entered into long-term gas supply contracts which are backed by gas pre-paid bonds. In 2010, BP was unsuccessful in the remarketing of these
bonds and repurchased them. The outstanding bonds associated with these long-term gas supply contracts held by BP are recorded within other
investments, with the related liability recorded within other payables on the balance sheet. The fair value of the gas pre-paid bonds is the same as the
carrying amount, as the bonds are based on floating rate interest with weekly market re-set, and as such are in level 1 of the fair value hierarchy.
28. Inventories
$ million
2012 2011
Crude oil 9,123 7,702
Natural gas 187 178
Refined petroleum and petrochemical products 15,149 14,909
24,459 22,789
Supplies 2,408 2,057
26,867 24,846
Trading inventories 1,000 815
27,867 25,661
Cost of inventories expensed in the income statement 293,242 285,618
The inventory valuation at 31 December 2012 is stated net of a provision of $124 million (2011 $152 million) to write inventories down to their net
realizable value. The net movement in the year in respect of inventory net realizable value provisions was a credit of $28 million (2011 $111 million
debit). Inventories with a carrying amount of $64 million (2011 nil) had been pledged as security for certain of the group’s liabilities at 31 December
2012.
29. Trade and other receivables
$ million
2012 2011
Current Non-current Current Non-current
Financial assets
Trade receivables 25,977 151 27,929 508
Amounts receivable from jointly controlled entities 952 761 1,004 612
Amounts receivable from associates 492 102 492 159
Other receivables 5,677 702 5,429 746
33,098 1,716 34,854 2,025
Non-financial assets
Gulf of Mexico oil spill trust fund reimbursement asseta4,178 2,264 8,233 1,642
Other receivables 388 774 439 670
4,566 3,038 8,672 2,312
37,664 4,754 43,526 4,337
aSee Note 2 for further information.
Trade and other receivables are predominantly non-interest bearing. See Note 26 for further information.
30. Cash and cash equivalents
$ million
2012 2011
Cash at bank and in hand 5,800 4,872
Term bank deposits 9,243 4,878
Cash equivalents 4,505 4,317
19,548 14,067
Cash and cash equivalents comprise cash in hand; current balances with banks and similar institutions; term deposits of three months or less with banks
and similar institutions; and short-term highly liquid investments that are readily convertible to known amounts of cash, are subject to insignificant risk of
changes in value and have a maturity of three months or less from the date of acquisition. The carrying amounts of cash at bank and in hand and term
bank deposits approximate their fair values. Substantially all of the other cash equivalents are categorized within level 1 of the fair value hierarchy.
Cash and cash equivalents at 31 December 2012 includes $1,544 million (2011 $901 million) that is restricted. This relates principally to amounts
required to cover initial margin on trading exchanges and $709 million relating to the dividend received from TNK-BP in December 2012 which meets the
criteria to be treated as restricted cash until completion of the anticipated sale of BP’s interest in TNK-BP to Rosneft. See Note 4 and Note 26 for further
information.
226 Financial statements
BP Annual Report and Form 20-F 2012