Notes to The Consolidated Financial Statements
AL MAZAYA HOLDING K.S.C. (HOLDING) AND ITS SUBSIDIARIES
For the year ended 31 December 2011
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 consolidated 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.
Property and equipment
Property and equipment are carried at cost less accumulated depreciation and any accumulated impairment losses. Cost
includes expenditure that is directly attributable to the acquisition of the asset (including borrowing costs).
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can
be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are
charged to the consolidated statement of income during the year in which they are incurred.
Depreciation is calculated based on the estimated useful lives of the applicable assets on a straight-line basis commencing
when the assets are ready for their intended use.
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