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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)
Where any Group's company purchases the Parent Company's equity share capital (treasury
shares), the consideration paid, including any directly attributable incremental costs is deducted from
equity attributable to the Parent Company's equity holders until the shares are cancelled or reissued.
Where such shares are subsequently reissued, any consideration received, net of any directly
attributable incremental transaction costs, is included in equity attributable to the Parent Company's
equity holders.
t) Revenue recognition
The Group recognizes revenue when the amount of revenue can be reliably measured, it is probable
that future economic benefits will flow to the entity and specific criteria have been met for each of the
Group's activities as described below. The amount of revenue is not considered to be reliably
measurable until all contingencies relating to the sale have been resolved. The Group bases its
estimates on historical results, taking into consideration the type of customer, the type of transaction
and the specifics of each arrangement.
i)
Sale of property:
Revenue on sale of plots of land is recognized on the basis of the full accrual method as and
when all of the following conditions are met:
•
A sale is consummated and contracts are signed;
•
The buyer's investment, to the date of the financial statements, is adequate to demonstrate
a commitment to pay for the property;
•
The Group's receivable is not subject to future subordination;
•
The Group has transferred to the buyer the usual risks and rewards of ownership in a
transaction that is in substance a sale and does not have a substantial
continuing
involvement with the property; and
•
Work to be completed is either easily measurable and accrued or is not significant in
relation to the overall value of the contract.
If all except for the last criterion listed above are fulfilled, the percentage of completion method is
adopted to recognize revenue.
The risk of the purchaser being able to rescind the contract for reasons stated in the contract which
are dependent on the enactment of pending legislation and therefore outside the Group's control is
considered by management to be remote.
Revenue on sale of apartments and villas is recognized on the basis of percentage completion
based on internal surveys of work performed as and when all the following conditions are met:
•
The buyer's investment, to the date of the financial statements, is adequate to demonstrate
a commitment to pay for the property;
•
Construction is beyond a preliminary stage. The engineering, design work, construction
contract execution, site clearance and building foundation are finished;
•
The buyer is committed. The buyer is unable to require a refund except for non-delivery of
the unit and, in certain cases, in the event of the non-enactment of pending legislation
regarding freehold title and immigration visas. Management believes that the likelihood of
the Group being unable to fulfill its contractual obligations for these reasons is remote; and
•
The aggregate sales proceeds and costs can be reasonably estimated.
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