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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)
0)
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
life 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.
p) Leasehold right
Leasehold right represents a long term lease agreement. The Group amortizes the lease value over the
lease period.
q) Goodwill
Goodwill arising on an acquisition of a subsidiary, jointly controlled entity or associate represents the
excess of the cost of the acquisition over the fair value of the identifiable assets, liabilities and
contingent liabilities as at the date of the acquisition. Goodwill is initially recognized as an asset at
cost and is subsequently measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill is allocated to each of the Group's cash-generating
units expected to benefit from the synergies of the combination. Cash-generating units to which
goodwill has been allocated are tested for impairment annually, or more frequently when there is an
indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less
than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying
amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the
basis of the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is
not reversed in a subsequent period.
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