Notes to The Consolidated Financial Statement
AL MAZAYA HOLDING COMPANY K.S.C. AND ITS SUBSIDIARIES
31 December 2012
Jointly controlled assets
The Group has joint control of certain properties held for trading. The Group recognises its interests in the jointly controlled
asset using the proportionate consolidation method whereby the Group includes its share of the asset and liabilities and
related income and expenses on a line by line basis in its consolidated financial statements.
Investment in associates
The Group’s investments in its associates are accounted for under the equity method of accounting. An associate is an
entity in which the Group has significant influence and which is neither a subsidiary nor a joint venture.
Under the equity method, investment in an associate is initially recognised at cost and adjusted thereafter for the post-
acquisition change in the Group’s share of net assets of the associate. Goodwill relating to the associate is included in the
carrying amount of the investment and is neither amortised nor individually tested for impairment.
The Group recognises in the consolidated statement of income its share of the total recognised profit or loss of the associate
from the date that influence or ownership effectively commenced until the date that it effectively ceases. Distributions
received from an associate 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 associate arising from changes in the associate’s equity that have been
recognised in the associate’s statement of comprehensive income.
The Group’s share of those changes is recognised directly in equity. Unrealised gains on transactions with an associate are
eliminated to the extent of the Group’s share in the associate. Unrealised losses are also eliminated unless the transaction
provides evidence of impairment in the asset transferred.
An assessment of investment in an associate is performed when there is an indication that the asset has been impaired, or
that impairment losses recognised in prior years no longer exist. Whenever impairment requirements of IAS 36, indicate
that investment in an associate may be impaired, the entire carrying amount of investment is tested by comparing its
recoverable amount with its carrying value.
The difference in reporting dates of the associates and the Group is not more than three months. Adjustments are made
for the effects of significant transactions or events that occur between that date and the date of the Group’s consolidated
financial statements. The associate’s accounting policies conform to those used by the Group for like transactions and
events in similar circumstances.
Upon loss of significant influence over the associate, the Group measures and recognises any retaining investment at its fair
value. Any differences between the carrying amount of the associate upon loss of significant influence and the fair value of
the remaining investment and proceeds from disposal are recognised in the consolidated statement of income.
Investment properties
Investment property comprises developed property and property under construction or re-development held to earn rentals
or for capital appreciation or both. Property held under a lease is classified as investment property when the definition of
an investment property is met.
Investment property is measured initially at cost including transaction costs. Transaction costs include transfer taxes,
professional fees for legal services and initial leasing commissions to bring the property to the condition necessary for it to
be capable of operating. The carrying amount also includes the cost of replacing part of an existing investment property at
the time that cost is incurred if the recognition criteria are met.
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