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AL MAZAYA HOLDING COMPANY K.S.C. (CLOSED) AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007
(All amounts are in Kuwaiti Dinars)
Investment properties are derecognized when either they have been disposed of or when the
investment property is permanently withdrawn from use and no future economic benefit is expected
from its disposal. Gains or losses arising on the retirement or disposal of an investment property are
recognized in the consolidated statement of income.
Transfers are made to investment property when, and only when, there is a change in use, evidenced
by the end of owner occupation, commencement of an operating lease to another party or completion
of construction or development. Transfers are made from investment property when, and only when,
there is a change in use, evidenced by commencement of owner occupation or commencement of
development with a view to sale.
k) Fixed assets
The initial cost of fixed assets comprises its purchase price and any directly attributable costs of
bringing the asset to its working condition and location for its intended use. Expenditures incurred
after the fixed assets have been put into operation, such as repairs and maintenance and overhaul
costs, are normally charged to the consolidated statement of income in the period in which the costs
are incurred. In situations where it can be clearly demonstrated that the expenditures have resulted in
an increase in the future economic benefits expected to be obtained from the use of an item of fixed
assets beyond its originally assessed standard of performance, the expenditures are capitalized as
an additional cost of fixed assets.
Fixed assets are stated at cost less accumulated depreciation and impairment losses. When assets
are sold or retired, their cost and accumulated depreciation are eliminated from the accounts and any
gain or loss resulting from their disposal is included in the consolidated statement of income.
Land is not depreciated. Depreciation is computed on a straight-line basis over the estimated useful
lives of other fixed assets as follows:
Furniture and equipment
Leasehold improvements
Computers and softwares
Motor vehicles
Years
5
3-5
3
5
Certain fixed assets used in certain projects are depreciated over the period of the respective
contracts.
The useful life and depreciation method are reviewed periodically to ensure that the method and
period of depreciation are consistent with the expected pattern of economic benefits from items of
fixed assets.
I) Leasehold right
Leasehold right represents a long term lease agreement. The Group amortizes the lease value over the
lease period.
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