20 / 29
AL MAlAYA HOLDING COMPANY
K.S.C.
(HOLDING) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31,
2010
(A" amounts are in Kuwaiti Dinars)
j)
Joint venture
A joint venture is a contractual arrangement whereby the Group and other parties undertake an
economic activity that is subject to joint control that is when the strategic financial and operating policy
decisions relating to the activities require the unanimous consent of the parties sharing control.
Where a Group undertakes its activities under joint venture arrangements directly, the Group's share
of jointly controlled assets and any liabilities incurred jointly with other venturers are recognized in the
financial statements of the relevant group and classified according to their nature. Liabilities and
expenses incurred directly in respect of interests in jointly controlled assets are accounted for on an
accrual basis. Income from the sale or use of the Group's share of the output of jointly controlled
assets, and its share of joint venture expenses, are recognized when it is probable that the economic
benefits associated with the transactions will flow to/from the Group and their amount can be
measured reliably.
Joint venture arrangements that involve the establishment of a separate entity in which each venturer
has an interest are referred to as jointly controlled entities.
The Group reports its interests in jointly controlled entities using the equity method of accounting,
except when the investment is classified as held for sale, in which case it is accounted for under IFRS
5 "Non-current Assets Held for Sale and Discontinued Operations". Under the equity method,
investments in joint ventures are carried in the consolidated statement of financial position at cost as
adjusted for post-acquisition changes in the Group's share of the net assets of the joint venture, less
any impairment in the value of individual investments.
Any goodwill arising on the acquisition of the Group's interest in a jointly controlled entity is accounted
for in accordance with the Group's accounting policy for goodwill arising on the acquisition of an
associate.
Where the Group transacts with its jointly controlled entities, unrealized profits and losses are
eliminated to the extent of the Group's interest in the joint venture.
k) Associates
Associates are those enterprises in which the Group has significant influence, but not control, over the
financial and operating policy decisions. The consolidated financial statements include the Group's
share of the results and assets and liabilities of associates under the equity method of accounting
from the date that significant influence effectively commences until the date that significant influence
effectively ceases, except when the investment is classified as held for sale, in which case it is
accounted for under IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations". Under
the equity method, investments in associates are carried in the consolidated statement of financial
position at cost as adjusted for post-acquisition changes in the Group's share of the net assets of the
associate, less any impairment in the value of individual investments. Losses of an associate in
excess of the Group's interest in that associate which includes any long-term interests that, in
substance, form part of the Group's net investment in the associate are not recognized except to the
extent that the Group has an obligation or has made payments on behalf of the associate.
Gains or losses arising from transactions with associates are eliminated against the investment in the
associate to the extent of the Group's interest in the associate.
18