Page 36 - Q4-2024-EN

AL-MAZAYA HOLDING COMPANY - K.S.C. (PUBLIC)
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2023
(All amounts are in Kuwaiti Dinars)

c) Properties held for trading
When the intention of the Group is to sell land in the ordinary course of business, the land is classified
as properties held for trading.

d) Investment properties
When the intention of the Group is to earn rentals from land or hold land for capital appreciation or if
the intention is not determined for land, the land is classified as investment property.

- Allowance for expected credit losses
The determination of expected credit losses and the factors determining the impairment of the receivable
involve significant judgment.

- Classification of financial assets
On acquisition of a financial asset, the Group decides whether it should be classified as "at fair value
through profit or loss”, "at fair value through other comprehensive income" or “at amortized cost”. IFRS 9
requires all financial assets, except equity instruments and derivatives, to be assessed based on a
combination of the Group’s business model for managing the assets of the instrument’s contractual cash
flow characteristics. The Group follows the guidance of IFRS 9 on classifying its financial assets and is
explained in Note (2 - d).

- Business combinations
At the time of Group’s acquisition to subsidiaries, the Group considers whether the acquisition represents
the acquisition of a business or of an asset (or a group of assets and liabilities). The Group accounts for
an acquisition as a business combination where an integrated set of activities is acquired in addition to
the assets. More specifically, consideration is made to the extent of which significant processes are
acquired. The significance of processes requires significant judgment.

Where the acquisition of subsidiaries does not represent a business, it is accounted for as an acquisition
of an asset (or a group of assets and liabilities). The cost of acquisition is allocated to the assets and
liabilities acquired based on their relative fair values, and no goodwill or deferred tax is recognized.

- Taxes
The Group is subject to income taxes in numerous jurisdictions. Significant judgment is required in
determining the provision for income taxes. There are many transactions and calculations for which the
ultimate tax determination is uncertain during the ordinary course of business.

- Control assessment
When determining control over an investee, management considers whether the Group has a ‘de facto’
power to control an investee if it holds less than 50% of the investee’s voting rights. The assessment of
the investee’s relevant activities and the ability to use the Group’s power to affect the investee’s variable
returns requires significant judgment.

- Material non-controlling interests
The Parent Company’s management considers any non-controlling interests which accounts for more
than 10% of the related subsidiary’s equity as material. Disclosures pertaining to those non-controlling
interests are set out in (Note 18).

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