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AL MAZAYA HOLDING COMPANY K.S.C. (CLOSED) AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008
(All amounts are in Kuwaiti Dinars)
(iii) Construction contracts
Revenue from construction contracts that are considered to be within the scope of lAS 11 are
recognized in accordance with the percentage of completion method of accounting measured by
reference to the physical percentageof completion. The revenue recognition as per the above criteria
should correspond to the actual work completed. The determination of estimated costs and the
application of percentage of completion method involve estimation. Further, the budgeted cost and
revenue should consider the claims and variations pertaining to the contract.
(iv) Provision for doubtful debts
The extent of provision for doubtful debts involves estimation process. Provision for doubtful debts is
made when there is objective evidence that the Group will not be able to collect the debts, Bad debts
are written off when identified. The benchmarks for determining the amount of provision or write-down
include analysis, technical assessment and subsequent events. The provisions and write-down of
receivables are subject to management approval.
e) Principlesof consolidation
Subsidiaries are those enterprises controlled by the Parent Company. Control exists when the Parent
Company has the power, directly or indirectly, to govem the financial and operating policies of an
enterprise so as to obtain benefits from its activities. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control effectively commences
until the date that control effectively ceases. Inter-company balances and transactions, including inter-
company profits and unrealized profits and losses are eliminated on consolidation. Consolidated
financial statements are prepared using unifonmaccounting policies for like transactions and other
events in similar circumstances.
Minority interests in the net assets of consolidated subsidiaries are identified separately from the
Group's equity therein. Minority interests consist of the amount of those interests at the date of the
original business combination and the minority's share of changes in equity since the date of the
combination. Losses applicable to the minority in excess of the minority's interest in the subsidiary's
equity are allocated against the interests of the Group except to the extent that the minority has a
binding obligation and is able to make an additional investment to cover the losses.
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