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AL MAlAYA HOLDING COMPANY K.S.C. (CLOSED) AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008
(All amounts are in Kuwaiti Dinars)
3) Properties held for trading
When the intention of the Group is to sell land in the ordinary course of business, the land are
classified as properties held for trading.
4) Investment properties
When the intention of the Group is to earn rentals from land or hold land for capital appreciation
or if the intention is not determined for land, the land is classified as investment property.
(iv) Provision for doubtful debts
The determination of the recoverability of the amount due from customers and the factors determining
the impairment of the receivable involve significant judgment.
(v) Classification of investments
On acquisition of an investment, the Group decides whether it should be classified as "at fair value
through statement of income" or "available for sale". The Group follows the guidance of lAS 39 on
classifying its investments.
The Group classifies investments as "at fair value through income statement" if they are acquired
primarily for the purpose of short term profit making or if they are designated at fair value through
statement of income at inception, provided their fair values can be reliably estimated. All other
investments are classified as "available for sale".
(vi) Application of IFRIC 15 - Agreements for the construction of real estate.
The determination whether the agreements within the scope of lAS 11 - Construction Contracts or
lAS 18 - Revenue require significant judgment.
b) Estimates and assumptions
The key assumptions conceming the future and other key sources of estimating uncertainty at the
consolidated balance sheet date that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are discussed below.
(i) Fair value of unquoted equity investments
If the market for a financial asset is not active or not available, the Group establishes fair value by
using valuation techniques which include the use of recent arm's length transactions, reference to
other instruments that are substantially the same, discounted cash flow analysis, and option pricing
models refined to reflect the issuer's specific circumstances. This valuation requires the Group to
make estimates about expected future cash flows and discount rates that are subject to uncertainty.
(ii) Impairment of Goodwill
The Group determines whether goodwill is impaired at least on an annual basis. This requires an
estimation of the "value in use" of the asset or the cash-generating unit to which the goodwill is
allocated. Estimating a value in use requires the Group to make an estimate of the expected future
cash-flows from the asset or the cash-generating unit and also choose an appropriate discount rate in
order to calculate the present-value of the cash-flows.
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