Notes to The Consolidated Financial Statement
AL MAZAYA HOLDING COMPANY K.S.C. AND ITS SUBSIDIARIES
31 December 2012
Accounts payable and other credit balances
Liabilities are recognised for amounts to be paid in the future for goods or services received, whether billed by the supplier
or not.
Derecognition of financial assets and financial liabilities
Financial assets
A financial asset (or, where applicable a part of a financial asset or a group of similar financial assets) is derecognised
where:
• the rights to receive cash flows from the asset have expired;
• the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a)
the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred
nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. Where an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original
liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the
consolidated statement of income.
Offsetting of financial instruments
Financial assets and liabilities are offset and net amount is reported in the consolidated statement of financial position
when the Group has currently legal enforceable right to offset and intends to settle either on a net basis or to realise the
asset and settle the liability simultaneously.
Fair values of financial instruments.
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing
parties in an arm’s length transaction. Consequently, differences can arise between carrying values and the fair value
estimates.
Underlying the definitions of fair value is the presumption that the Group is a going concern without any intention or
requirement to materially curtail the scale of its operations or to undertake a transaction on adverse terms.
Financial instruments traded in organised financial markets, fair value is determined by reference to the quoted market
prices or dealer price quotations (bid prices for long positions and ask price for short position) without any deduction for
transaction costs.
For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques.
Such techniques may include using recent arm’s length market transactions, reference to the current fair value of another
instrument that is substantially the same; discounted cash flow analysis or other valuation models. An analysis of fair values
of financial instruments and further details as to how they are measured are provided in note 28.
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