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AL MAlAYA HOLDING COMPANY
K.S.C.
(CLOSED) AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007
(All amounts are in Kuwaiti Dinars)
h) Joint venture
A joint venture is a contractual arrangement whereby the Group and other parties undertake an
economic activity that is subject to joint control that is when the strategic financial and operating
policy decisions relating to the activities require the unanimous consent of the parties sharing control.
Where a Group undertakes its activities under joint venture arrangements directly, the Group's share
of jointly controlled assets and any liabilities incurred jointly with other venturers are recognized in the
financial statements of the relevant entity and classified according to their nature. Liabilities and
expenses incurred directly in respect of interests in jointly controlled assets are accounted for on an
accrual basis. Income from the sale or use of the Group's share of the output of jointly controlled
assets, and its share of joint venture expenses, are recognized when it is probable that the economic
benefits associated with the transactions will flow to/from the Group and their amount can be
measured reliably.
Joint venture arrangements that involve the establishment of a separate entity in which each venturer
has an interest are referred to as jointly controlled entities.
The Group reports its interests in jointly controlled entities using the equity method of accounting.
Under the equity method, investments in joint ventures are carried in the consolidated balance sheet
at cost as adjusted for post-acquisition changes in the Group's share of the net assets of the joint
venture, less any impairment in the value of individual investments.
Where the Group transacts with its jointly controlled entities, unrealized profits and losses are
eliminated to the extent of the Group's interest in the joint venture.
i) Properties under development
Properties acquired, constructed or in the course of construction for sale are classified as properties
under development. Unsold properties are stated at cost.
Sold properties in the course of
development are stated at cost plus attributable profit/loss less progress billings.
The cost of
properties 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.
The property is considered to be completed when all related activities, including the infrastructure and
facilities for the entire project, have been completed. At that stage, the total asset value is eliminated
from properties under development.
j)
Investment properties
Investment properties, which are properties, held to earn rentals and/or for capital appreciation, are
stated at their fair value at the balance sheet date. Gains or losses arising from changes in the fair
value of investment properties are included in the consolidated statement of income for the period in
which they arise.
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