MOSCOW--Russian state oil giant OAO Rosneft (ROSN.MZ) said it
had altered how it accounts for exchange rate fluctuations, a
change that will help insulate profits from the ruble's collapse
late last year.
The announcement came a day after BP PLC (BP), which owns nearly
one-fifth of Rosneft, said it recorded positive earnings from that
holding, surprising analysts who had expected a loss and attributed
it to the accounting change.
Rosneft's third-quarter profit shrank to 1 billion rubles ($23.6
million when announced in October), in part because of
foreign-exchange losses. The company is yet to publish its
fourth-quarter earnings.
In a regulatory filing explaining the move, Rosneft said it had
adopted "hedge accounting" from Oct. 1 last year as the increased
volatility of the ruble "can distort the effect of the actual
currency risk pertaining to the current period."
The company said losses or gains on foreign-currency loans would
be "temporarily recognized within other comprehensive income being
part of equity with no effect on profit or loss for the period,"
Rosneft said in a regulatory filing explaining the move.
Rosneft, headed by a close ally of President Vladimir Putin,
reported a net debt of $45 billion as of Sept. 30 last year, much
of which is denominated in euros or dollars.
-Write to James Marson at james.marson@wsj.com
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