14 / 43
AL MAZAYA HOLDING COMPANY K.S.C. AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDA TED FINANCIAL STATEMENTS
For the year ended 31 December 2011
MAlAYA
AlM10 LI'AD
3.
BASIS OF PREPRATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Basis of consolidation
These consolidated financial statements incorporate the financial statements of the Parent Company and
entities controlled by the Parent Company (its subsidiaries). Control is achieved where the Parent Company
has. the power to govern the financial and operating policies of an entity so as to obtain benefits from its
acti vities.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement
of income from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies into line with those used by other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation
Non-controlling interests in the net assets (excluding goodwill) of consolidated subsidiaries are identified
separately from the Group's equity therein. Non-controlling interests consist of the amount of those interests
at the date of the original business combination and the non-controlling interest's share of changes in equity
since the date of the combination.
Profits and losses are attributed to the owners of the Parent Company and to the non-controlling interests in
the ratio of their respective shareholdings even if this results in the non-controlling interests having a deficit
balance.
A change in the ownership interest of a subsidiary, without loss of control, is accounted for as an equity
transaction.
Business combinations
Acquisition of business is accounted for using the acquisition method. The cost of the acquisition is measured
at the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of
any non-controlling interest in the acquiree. For each business combination the acquirer measures the non-
controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree's
identifiable net assets. Acquisition related costs are recognised in the consolidated statement of income as
incurred.
Where appropriate, the cost of acquisition includes any asset or liability resulting from a contingent
consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values
are adjusted against the cost of acquisition where they qualify as measurement period adjustments. All other
subsequent changes in the fair value of contingent consideration classified as an asset or liability are
accounted for in accordance with relevant IFRS. Changes in the fair value of contingent consideration
classified as equity are not recognised.
The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition
under IFRS 3 (revised 2008) are recognised at their fair value at the acquisition date, except for non-current
assets (or disposal groups) that are classified as held for sale in accordance with
"[FRS
5
Non-current Assets
Held/or Sale and Discontinued Operations '',
which are measured at fair value less costs to sell.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which
the combination occurs, the Group reports provisional amounts for the items for which the accounting is
incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or
liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of
the acquisition date that, if known, would have affected the amounts recognised as of that date.
The measurement period is the period from the date of acquisition to the date the Group receives complete
information about facts and circumstances that existed as of the acquisition date and is subject to a maximum
of one year.
Where a business combination is achieved in stages, the Group's previously-held interests in the acquired
entity are remeasured to fair value at the acquisition date (i.e. the date the Group attains control) and the
resulting gain or loss, if any, is recognised in the consolidated statement of income. Amounts arising from
interests in the acquiree prior to the acquisition date that have previously been recognised in equity are
reclassified to the consolidated statement of income, where such treatment would be appropriate if that
interest is disposed off.
12