The group financial statements for Aker BP ASA include the subsidiaries as described in Note 2, page 153. The accounting policies are applied consistently when consolidating ownership interests in subsidi-aries and are based on the same reporting periods as those used for the parent company. When preparing the consolidated financial statements, intragroup transactions and balances, along with gains and losses on transactions between group units, are eliminated.
1.2 Functional currency and presentation currency
The presentation currency in the group\u2019s consolidated financial statements is United States Dollars ('USD'). The parent company of the group, Aker BP ASA, has USD as its functional currency as most revenue and financing are denominated in USD and this represents the primary economic environment in which the entity operates. Balance sheet items of subsidiaries in other functional currencies are translated into the presentation currency, USD, according to the exchange rates prevailing on the balance sheet date, while profit or loss items are translated according to average quarterly exchange rates for the relevant quarters.
1.3 Critical judgements and estimates
The preparation of financial statements in accordance with IFRS requires management to make judgements, estimates and assumptions that have an effect on the application of accounting policies and the reported assets, liabilities, income and expenses.
The important judgements management has made regarding the application of accounting policies are as follows: