By James Marson 
 

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