Notes to The Consolidated Financial Statement
AL MAZAYA HOLDING COMPANY K.S.C. AND ITS SUBSIDIARIES
31 December 2012
In subsequent phases, the IASB will address hedge accounting and impairment of financial assets. The adoption of the first
phase of IFRS 9 will have an effect on the classification and measurement of the Group’s financial assets, but will not have
an impact on classification and measurements of financial liabilities. The Group will quantify the effect in conjunction with
the other phases, when the final standard including all phases is issued.
IFRS 10 Consolidated Financial Statements, IAS 27 Separate Financial Statements
IFRS 10 replaces the portion of IAS 27 Consolidated and Separate Financial Statements that addresses the accounting for
consolidated financial statements. It also addresses the issues raised in SIC-12 Consolidation Special Purpose Entities.
IFRS 10 establishes a single control model that applies to all entities including special purpose entities. The changes
introduced by IFRS 10 will require management to exercise significant judgment to determine which entities are controlled
and therefore are required to be consolidated by a Parent Company, compared with the requirements that were in IAS 27.
Based on the preliminary analyses performed, IFRS 10 is not expected to have any material impact on the currently held
investments of the Group. This standard becomes effective for annual periods beginning on or after 1 January 2013.
IFRS 11 Joint Arrangements
IFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities — Non-monetary Contributions
by Ventures. IFRS 11 removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation.
Instead, JCEs that meet the definition of a joint venture must be accounted for using the equity method. The Group
currently accounts its interest in joint venture using equity method and proportionate consolidation based on the nature of
arrangement. Adoption of this IFRS will have effect on its accounting policy for joint ventures and consolidated statement
of financial position and consolidated statement of income for 2013 and retrospective changes will be made when this
new standard becomes effective for annual periods beginning on or after 1 January 2013.
IFRS 12 Disclosure of Interests in Other Entities
IFRS 12 includes all of the disclosures that were previously in IAS 27 related to consolidated financial statements, as well as
all of the disclosures that were previously included in IAS 31 and IAS 28. These disclosures relate to an Group’s interests in
subsidiaries, joint arrangements, associates and structured entities. A number of new disclosures are also required, but has
no impact on the Group’s financial position or performance. This standard becomes effective for annual periods beginning
on or after 1 January 2013.
IFRS 13 Fair Value Measurement
IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when
an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value
is required or permitted. The Group is currently assessing the impact that this standard will have on the financial position
and performance, but based on the preliminary analyses, no material impact is expected. This standard becomes effective
for annual periods beginning on or after 1 January 2013.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Parent Company and its subsidiaries for
the year ended 31 December 2012. The financial statements of the subsidiaries are prepared for the same reporting year
as the Parent Company, using consistent accounting policies. Inter-group balances and transactions, including inter-group
profits and unrealised profits and losses are eliminated upon consolidation.
Subsidiaries are those entities controlled by the Parent Company. Control exists when the Parent Company has the power,
directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The financial statements of subsidiaries are included in the consolidated financial statements from the date that control
effectively commences until the date that control effectively ceases.
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