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AL MAZA YA HOLDING COMPANY K.S.c. AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
MALAYA
AH'.\TOUAD
3.
BASIS OF PREPRA TION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial instruments (continued)
Available for sale investments
Investments available for sale are those non-derivative financial assets that are designated as available for sale
or are not classified as investments at fair value through profit or loss or loans and receivables.
After initial recognition, investments available for sale are measured at fair value with unrealised gains and
losses recognised as other comprehensive income in a separate component of equity until the investments are
derecognised or until the investments are determined to be impaired at which time the cumulative gain and
loss previously reported in other comprehensive income is recognised in the consolidated statement of
income. Investments whose fair value cannot be reliably measured are carried at cost less impairment losses,
if any.
Loans and receivables
These are non derivative financial assets with fixed or determinable payments that are not quoted in an active
market. These are subsequently measured and carried at amortized cost using the effective yield method.
Trade and other receivables are classified as loans and receivables.
Properties held for trading
Properties acquired, constructed or in the course of construction for sale are classified as properties held for
trading. Unsold properties are stated at cost or net realizable value whichever is less. The cost of properties
held for trading under development includes the cost of land and other related expenditure which are
capitalized as and when activities that are necessary to get the properties ready for sale are in progress. Net
realizable value represents the estimated selling price less costs to be incurred in selling the property.
Investment in associate
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an
interest in a joint venture. Significant influence is the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control over those policies.
The results and assets and liabilities of associates are incorporated in these consolidated financial statements
using the equity method of accounting, except when the investment is classified as held for sale, in which case
it is accounted for in accordance with IFRS 5
"Non-current Assets Held for Sale and Discontinued
Operations ",
Under the equity method, investments in associate is carried in the consolidated statement of
financial position at cost and 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 recognised only to the
extent that the Group has incurred legal or constructive obligations or made payments on behalf of the
associate.
Any excess, of the cost of acquisition over the Group's share of the net fair value of the identifiable assets,
.liabilities and contingent liabilities of the associate recognised at the date of acquisition is recognised as
goodwill. The goodwill is included within the carrying amount of the investment and is assessed for
impairment as part of that investment. Any excess of the Group's share of the net fair value of the identifiable
assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised
immediately in the consolidated statement of comprehensive income.
Where the Group transacts with its associate, profits and losses are eliminated to the extent of the Group's
interest in the relevant associate
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