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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)
An investment is designated by the management on initial recognition if such designation eliminates
or significantly reduces a measurement or recognition inconsistency that would otherwise arise or; if
they are managed and their performance is evaluated and reported internally on a fair value basis in
accordance with a documented risk management or investment strategy.
Investments in this category are classified as current assets if they are either held for trading or are
expected to be realized within 12 months of the consolidated balance sheet date.
(ii)
Investments available for sale
Investments available for sale are non-derivative financial assets that are either designated in this
category or not classified in any of the other categories. They are included in non-current assets
unless management intends to dispose of the investment within 12 months of the balance sheet date.
Purchases and sales of investments are recognized on trade date - the date on which the Group
commits to purchase or sell the asset. Investments are initially recognized at fair value plus
transaction costs for all financial assets not carried at fair value through income statement.
After initial recognition, investments at fair value through income statement and investments available
for sale are subsequently carried at fair value. The fair values of quoted investments are based on
current bid prices. If the market for an investment is not active (and for unlisted securities), the Group
establishes fair value by using valuation techniques. These 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.
Realized and unrealized gains and losses from investments at fair value through income statement
are included in the consolidated statement of income. Unrealized gains and losses arising from
changes in the fair value of investments available for sale are recognized in cumulative changes in fair
value in consolidated statement of changes in equity.
Where investments available for sale could not be measured reliably, these are stated at cost less
impairment losses, if any.
When an investment available for sale is disposed off or impaired, any prior fair value earlier reported
in the consolidated statement of equity is transferred to the consolidated statement of income.
An investment (in whole or in part) is derecognized either when: the contractual rights to receive the
cash flows from the investment have expired; or the Group has transferred its rights to receive cash
flows from the investment and either (a) has transferred substantially all the risks and rewards of
ownership of the investment, or (b) has neither transferred nor retained substantially all the risks and
rewards of the investment, but has transferred control of the investment. Where the Group has
retained control, it shall continue to recognize the investment to the extent of its continuing
involvement in the investment.
The Group assesses at each balance sheet date whether there is an objective evidence that a
financial asset or a group of financial assets is impaired. In the case of equity securities classified as
available for sale, a significant or prolonged decline in the fair value of the security below its cost is
considered in determining whether the securities are impaired. If any such evidence exists for
investments available for sale, the cumulative loss - measured as the difference between the
acquisition cost and the current fair value, less any impairment loss on that investment previously
recognized in profit or loss - is removed from the consolidated statement of equity and recognized in
the consolidated statement of income. Impairment losses recognized in the consolidated statement of
income on available for sale equity instruments are not reversed through the consolidated statement
of income.
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