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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 20 I I
MAlAYA
NMlOLMD
3.
BASIS OF PREPRATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Investment in 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.
Investment properties
Investment properties, which are properties constructed or in course of construction, held to earn rentals and/or
for capital appreciation, are stated at their fair value at the end of the reporting period. Gains or losses arising
from changes in the fair value of investment properties are included in the canso Iidated statement of income for
the period in which they arise.
Property interest that is held under an operating lease is classified and accounted for as investment property
when the property would otherwise meet the definition of an investment property and the lessee uses the fair
value model.
Investment properties are derecognized when either they have been disposed of or when the investment
property is permanently withdrawn from use and no future economic benefit is expected from its disposal.
Gains or losses arising on the retirement or disposal of an investment property are recognized in the
consolidated statement of income.
Transfers are made to investment property when, and only when, there is a change in use, evidenced by the end
of owner occupation, commencement of an operating lease to another party. Transfers are made from
investment property when, and only when, there is a change in use, evidenced by commencement of owner
occupation.
Fair value of investment properties is arrived at by reference to industry acknowledged methods of valuations
that depend on market data including recent sales values of comparable properties, capitalization rates and other
observable market data.
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