Notes to The Consolidated Financial Statement
AL MAZAYA HOLDING COMPANY K.S.C. AND ITS SUBSIDIARIES
31 December 2012
Impairment of financial assets
The Group assesses at each reporting date whether there is any objective evidence that a financial asset or a group of
financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there
is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the
asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset
or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the
borrowers or a group of borrowers is experiencing significant financial difficulty, default or delinquency in interest or
principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable
data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic
conditions that correlate with defaults.
Financial assets available for sale
For financial assets available for sale, the Group assess at each reporting date whether there is objective evidence that
a financial asset available for sale or a group of financial assets available for sale is impaired. In the case of equity
investments classified as available for sale, objective evidence would include a significant or prolonged decline in the
fair value of the equity investment below its cost. ‘Significant’ is evaluated against the original cost of investment and
‘prolonged’ against the period in which fair value has been below its cost. Where there is evidence of impairment, the
cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment
loss on those financial assets available for sale previously recognised in the consolidated statement of income is removed
from other comprehensive income and recognised in the consolidated statement of income.
Impairment losses in equity investments are not reversed through consolidated statement of income; subsequent increase
in their fair value after impairment is recognized directly in other comprehensive income.
Impairment of receivable
An estimate of the collectible amount of receivable is made when collection of the full amount is no longer probable. For
individually significant amounts, this estimation is performed on an individual basis. Amounts which are not individually
significant, but which are past due, are assessed collectively and a provision applied according to the length of time past
due, based on historical recovery rates.
Interest in joint ventures
Jointly controlled entities
The Group has investment in joint venture, which are jointly controlled entity, whereby the venturers have a contractual
arrangement that establishes joint control over the economic activities of the entities. The arrangement requires unanimous
agreement for financial and operating decisions among the venturers. The Group recognises its interest in the joint venture
using the equity method. Under the equity method, investment in a joint venture is initially recognised at cost and adjusted
thereafter for the post-acquisition change in the Group’s share of net assets of the joint venture. Any goodwill arising on
the acquisition of the Group’s interest in a jontly control entity is accounted for in accordance with the Group’s accounting
policy for goodwill arising on the acquisition of joint venture.
The Group recognises in the consolidated statement of income its share of the total recognised profit or loss of the
joint venture from the date that influence or ownership effectively commenced until the date that it effectively ceases.
Distributions received from a joint venture reduce the carrying amount of the investment. Adjustments to the carrying
amount may also be necessary for changes in the Group’s share in the joint venture arising from changes in the joint
venture’s equity that have not been recognised in the joint venture’s statement of income. The Group’s share of those
changes is recognised directly in equity. Unrealised gains on transactions with an joint venture are eliminated to the extent
of the Group’s share in the joint venture. Unrealised losses are also eliminated unless the transaction provides evidence of
impairment in the asset transferred
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