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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)
x) 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 properties:
Revenue on sale of properties under development is recognized as follows:
• When the agreement is within the scope of lAS 11 - construction contracts and its outcome
can be estimated reliably, the Group recognizes the revenue by reference to the stage of
completion of the contract activity in accordance with lAS 11 - construction contracts.
• When the agreement is within the scope of lAS 18 - Revenue, Group recognizes revenue at
time of completion. When the significant risks and rewards of ownership of real estate are
being transferred from Group at a single time.
• If the significant risks and rewards of ownership are transferred as when construction
progresses, the Group recognize revenue by reference to the percentage of completion
method.
• If there is a doubt about the future economic benefits will flow to the Group, the Group
recognizes revenue based on the installment percentage.
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.
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