Annual report eng.2018

N otes To The Consolidated Financial Statements AL MAZAYA HOLDING K.S.C.P. AND ITS SUBSIDIARIES As At 31 December 2018 99 ANNUAL REPORT 2018 (All amounts are in Kuwaiti Dinars) Initial recognition Purchases and sales of those financial assets are recognized on settlement date – the date onwhich an asset is delivered to or by the Group. Financial assets are initially recognized at fair value plus transaction costs for all financial assets not carried at FVPL. Derecognition A financial asset (in whole or in part) is derecognized either when: the contractual rights to receive the cash flows from the financial asset have expired; or the Group has transferred its rights to receive cash flows from the financial asset and either a) Has transferred substantially all the risks and rewards of ownership of the financial asset, or b) Has neither transferred nor retained substantially all the risks and rewards of the financial asset, but has transferred control of the financial asset. Where the Group has retained control, it shall continue to recognize the financial asset to the extent of its continuing involvement in the financial asset. Measurement categories of financial assets The IAS 39 measurement categories of financial assets (fair value through profit or loss (FVPL), available for sale (AFS), held-to-maturity, loans and receivables) have been replaced by: • Debt instruments at amortized cost • Debt instruments at fair value through other comprehensive income (FVOCI), with gains or losses recycled to consolidated statement of profit or loss on derecognition • Equity instruments at FVOCI, with no recycling of gains or losses to consolidated statements of profit or loss on derecognition • Financial assets at fair value through profit or loss FVPL Debt instruments at amortized cost A financial asset is measured at amortized cost if it meets both of the following conditions: - The asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and - The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding. Debt instruments measured at amortized cost are subsequently measured at amortized cost using the effective yield method adjusted for impairment losses if any. Gain and losses are recognized in consolidated statement of profit and loss when the asset is derecognized, modified or impaired. Cash and cash equivalents, and trade receivables are classified as debt instruments at amortized cost. - Cash and cash equivalents Cash and cash equivalents includes cash in hand and at banks, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. - Trade receivables Receivables are amounts due from customers and tenants for units sold or rent or services performed in the ordinary course of business and is recognized initially at fair value and are subsequently measured at amortized cost using the effective interest method, less provision for impairment.