Notes to The Consolidated Financial Statements
AL MAZAYA HOLDING K.S.C. (HOLDING) AND ITS SUBSIDIARIES
For the year ended 31 December 2011
Measurement
All financial assets and liabilities are initially measured at fair value. Transaction costs are added only for those financial
instruments not measured at fair value through profit or loss.
Available for sale investments
Investments available for sale are those non-derivative financial assets that are designated as available for sale or are not
classified as investments at fair value through profit or loss or loans and receivables.
After initial recognition, investments available for sale are measured at fair value with unrealised gains and losses
recognised as other comprehensive income in a separate component of equity until the investments are derecognised or
until the investments are determined to be impaired at which time the cumulative gain and loss previously reported in
other comprehensive income is recognised in the consolidated statement of income. Investments whose fair value cannot
be reliably measured are carried at cost less impairment losses, if any.
Loans and receivables
These are non derivative financial assets with fixed or determinable payments that are not quoted in an active market. These
are subsequently measured and carried at amortized cost using the effective yield method. Trade and other receivables are
classified as loans and receivables.
Properties held for trading
Properties acquired, constructed or in the course of construction for sale are classified as properties held for trading.
Unsold properties are stated at cost or net realizable value whichever is less. The cost of properties held for trading under
development includes the cost of land and other related expenditure which are capitalized as and when activities that are
necessary to get the properties ready for sale are in progress. Net realizable value represents the estimated selling price less
costs to be incurred in selling the property.
Investment in associate
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a
joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee
but is not control or joint control over those policies.
The results and assets and liabilities of associates are incorporated in these consolidated financial statements using the
equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for
in accordance with IFRS 5 “
Non-current Assets Held for Sale and Discontinued Operations
”. Under the equity method,
investments in associate is carried in the consolidated statement of financial position at cost and adjusted for post-
acquisition changes in the Group’s share of the net assets of the associate, less any impairment in the value of individual
investments.
Losses of an associate in excess of the Group’s interest in that associate (which includes any long-term interests that, in
substance, form part of the Group’s net investment in the associate) are recognised only to the extent that the Group has
incurred legal or constructive obligations or made payments on behalf of the associate.
Any excess, of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities
and contingent liabilities of the associate recognised at the date of acquisition is recognised as goodwill. The goodwill
is included within the carrying amount of the investment and is assessed for impairment as part of that investment. Any
excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost
of acquisition, after reassessment, is recognised immediately in the consolidated statement of comprehensive income.
Where the Group transacts with its associate, profits and losses are eliminated to the extent of the Group’s interest in the
relevant associate
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