Notes to The Consolidated Financial Statement
AL MAZAYA HOLDING COMPANY K.S.C.P. AND ITS SUBSIDIARIES
31 December 2014
Notes to The Consolidated Financial Statement
AL MAZAYA HOLDING COMPANY K.S.C.P. AND ITS SUBSIDIARIES
31 December 2014
Impairment of receivable
An estimate of the collectible amount of receivable is made when collection of the full amount is no longer probable. For
individually significant amounts, this estimation is performed on an individual basis. Amounts which are not individually
significant, but which are past due, are assessed collectively and a provision applied according to the length of time past
due, based on historical recovery rates.
Fair value measurement
The Group measures financial instruments, such as, financial asset available for sale and non-financial assets, at fair value
at each statement of financial position date. Fair value is the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is
based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
• In the principal market for the asset or liability, or
• In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible to the Group. The fair value of an asset or a liability
is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that
market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset
in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available
to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
Fair value measurement of financial instruments
Fair values for financial instruments traded in active markets are based on closing bid prices. For all other financial
instruments including financial instruments for which the market has become inactive, the fair value is determined by using
appropriate valuation techniques. Valuation techniques include the fair value derived from recent arm’s length transaction,
comparison to similar instruments for which market observable prices exist, discounted cash flow method or other relevant
valuation techniques commonly used by market participants. For investments in equity instruments, where a reasonable
estimate of fair value cannot be determined, the investment is carried at cost.
The fair value of financial instruments carried at amortised cost, other than short-term in nature is estimated by discounting
the future contractual cash flows at the current market interest rates for similar financial instruments.
Fair value measurement of non-financial instruments
Fair values of non-financial instruments are measured based on valuation provided by independent valuers.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement
as a whole:
• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable
• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable
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For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether
transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level input that
is significant to the fair value measurement as a whole) at the end of each reporting period.
Interest in joint ventures
Jointly controlled entities
The Group has investment in joint venture, which are jointly controlled entity, whereby the venturers have a contractual
arrangement that establishes joint control over the economic activities of the entities. The arrangement requires unanimous
agreement for financial and operating decisions among the venturers. The Group recognises its interest in the joint venture
using the equity method. Under the equity method, investment in a joint venture is initially recognised at cost and adjusted
thereafter for the post-acquisition change in the Group’s share of net assets of the joint venture. Any goodwill arising on the
acquisition of the Group’s interest in a jointly control entity is accounted for in accordance with the Group’s accounting
policy for goodwill arising on the acquisition of joint venture.
The Group recognises in the consolidated statement of income its share of the total recognised profit or loss of the
joint venture from the date that influence or ownership effectively commenced until the date that it effectively ceases.
Distributions received from a joint venture reduce the carrying amount of the investment. Adjustments to the carrying
amount may also be necessary for changes in the Group’s share in the joint venture arising from changes in the joint
venture’s equity that have not been recognised in the joint venture’s statement of income. The Group’s share of those
changes is recognised directly in equity. Unrealised gains on transactions with an joint venture are eliminated to the extent
of the Group’s share in the joint venture. Unrealised losses are also eliminated unless the transaction provides evidence of
impairment in the asset transferred
Jointly controlled assets
The Group has joint control of certain properties held for trading. The Group recognises its interests in the jointly controlled
asset using the proportionate consolidation method whereby the Group includes its share of the asset and liabilities and
related income and expenses on a line by line basis in its consolidated financial statements.
Investment in associates
An associate is an entity over which the Group has significant influence. 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 considerations made in determining significant influence are similar to those necessary to determine control over
subsidiaries.
The Group’s investment in its associate is accounted for using the equity method. Under the equity method, the investment
in the associate is carried in the consolidated statement of financial position at cost plus post acquisition changes in the
Group’s share of net assets of the associate. Unrealised gains and losses resulting from transactions between the Group and
the associate are eliminated to the extent of the interest in the associate.
The Group recognises in the consolidated statement of income its share of the total recognised profit or loss of the associate
from the date that influence or ownership effectively commenced until the date that it effectively ceases. Distributions
received from an associate reduce the carrying amount of the investment. Adjustments to the carrying amount may also be
necessary for changes in the Group’s share in the associate arising from changes in the associate’s equity that have been
recognised in the associate’s statement of comprehensive income.
The Group’s share of those changes is recognised directly in equity. Unrealised gains on transactions with an associate are
eliminated to the extent of the Group’s share in the associate. Unrealised losses are also eliminated unless the transaction
provides evidence of impairment in the asset transferred.
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