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AL MAlAYA HOLDING COMPANY K.S.C. (HOLDING) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31,2010
(All amounts are in Kuwaiti Dinars)
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount.
An impairment loss is recognized immediately in the consolidated statement of income, unless the
relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a
revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating
unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment
loss been recognized for the asset (cash-generating unit) in prior years. A reversal of an impairment
loss is recognized immediately in the consolidated statement of income, unless the relevant asset is
carried at a revalued amount, in which case the reversal of the impairment loss is treated as a
revaluation increase.
q) Accounts payable
Accounts payable are recognized initially at fair value and subsequently measured at amortized cost
using the effective interest method.
r) Borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are
subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs)
and the redemption value is recognized in the consolidated statement of income over the period of the
borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the
extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is
deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some
or all of the facility will be drawn down, the
fee
is capitalized as a pre-payment for liquidity services
and amortized over the period of the facility to which it relates.
s) Wakala and Murabaha payable
Wakala and Murabaha payables represent an agreement whereby the Group takes a certain amount
of cash from another party, and invests it according to specific conditions in return for a certain fee
(percentage of the amount invested). They are subsequently re-measured and carried out at
amortized cost using the effective yield method. Costs of Wakala and Murabaha payable are
expensed on a time proportion basis.
t) Provision for end of service indemnity
Provision is made for amounts payable to employees under the Kuwaiti Labor Law in the private
sector and employees' contracts. This liability, which is unfunded, represents the amount payable to
each employee as a result of involuntary termination at the end of the reporting period, and
approximates the present value of the final obligation.
u) Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction
from the proceeds.
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