Notes to The Consolidated Financial Statements
AL MAZAYA HOLDING K.S.C. (HOLDING) AND ITS SUBSIDIARIES
For the year ended 31 December 2011
3. BASIS OF PREPRATION AND SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
(“IFRS”) on the historical cost basis as amended for the revaluation of available for sale investments and investment
properties. The principal accounting policies are set out below. These consolidated financial statements are presented in
Kuwaiti Dinars (“KD”), which is the Parent Company’s functional and presentation currency.
Basis of consolidation
These consolidated financial statements incorporate the financial statements of the Parent Company and entities controlled
by the Parent Company (its subsidiaries). Control is achieved where the Parent Company has the power to govern the
financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of income
from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into
line with those used by other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation
Non-controlling interests in the net assets (excluding goodwill) of consolidated subsidiaries are identified separately from
the Group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original
business combination and the non-controlling interest’s share of changes in equity since the date of the combination.
Profits and losses are attributed to the owners of the Parent Company and to the non-controlling interests in the ratio of their
respective shareholdings even if this results in the non-controlling interests having a deficit balance.
A change in the ownership interest of a subsidiary, without loss of control, is accounted for as an equity transaction.
Business combinations
Acquisition of business is accounted for using the acquisition method. The cost of the acquisition is measured at the
aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling
interest in the acquiree. For each business combination the acquirer measures the non-controlling interest in the acquiree
either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition related costs are
recognised in the consolidated statement of income as incurred.
Where appropriate, the cost of acquisition includes any asset or liability resulting from a contingent consideration
arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the
cost of acquisition where they qualify as measurement period adjustments. All other subsequent changes in the fair value
of contingent consideration classified as an asset or liability are accounted for in accordance with relevant IFRS. Changes
in the fair value of contingent consideration classified as equity are not recognised.
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under
IFRS 3 (revised 2008) are recognised at their fair value at the acquisition date, except for non-current assets (or disposal
groups) that are classified as held for sale in accordance with “
IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations
”, which are measured at fair value less costs to sell.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those
provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognised, to
reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known,
would have affected the amounts recognised as of that date.
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