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 111 ANNUAL REPORT 2018 (All amounts are in Kuwaiti Dinars) Under IFRS 15, revenue is recognized either at a point in time or over time, when (or as) the Group satisfies performance obligations by transferring the promised goods or services to its customers. The Group transfers control of a good or service over time (rather than at a point in time) when any of the following criteria are met: • The customer simultaneously receives and consumes the benefits provided by the entity’s performance as the entity performs. • The Group’s performance creates or enhances an asset (e.g., work in process) that the customer controls as the asset is created or enhanced. • The Group’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date. Control is transferred at a point in time if none of the criteria for a good or service to be transferred over time are met. The Group considers the following factors in determining whether control of an asset has been transferred: • The Group has a present right to payment for the asset. • The customer has legal title to the asset. • The Group has transferred physical possession of the asset. • The customer has the significant risks and rewards of ownership of the asset. • The customer has accepted the asset. The Group recognizes contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as other liabilities in the consolidated statement of financial position. Similarly, if the Group satisfies a performance obligation before it receives the consideration, the Group recognizes either a contract asset or a receivable in its consolidated statement of financial position, depending on whether something other than the passage of time is required before the consideration is due. Incremental costs of obtaining a contract with a customer are capitalized when incurred as the Group expects to recover these costs and such costs would not have incurred if the contract has not been obtained. Sales commission incurred by the Group is expensed as the amortization period of such costs is less than a year. Revenue for the Group arises from the following activities: Sale of properties under development Revenue is recognized when control over the property has been transferred to the customer. The properties have generally no alternative use for the Group due to contractual restrictions. However, an enforceable right to payment does not arise until legal title has passed to the customer. Therefore, revenue is recognized at a point in time when the legal title has passed to the customer and is measured at the transaction price agreed under the contract. Rent Rental income is recognized, when earned, on a time apportionment basis. Management fees Fees income earned from services provided over a period of time is recognized over this time. Revenue on sale of properties Revenue on sale of properties is recognized on the basis of the full accrual method as and when all of the following conditions are met: • A sale is consummated and contracts are signed. • The buyer’s investment, to the date of the consolidated financial statements, is adequate to demonstrate a commitment to pay for the property. • The Group’s receivable is not subject to future subordination. • The Group has transferred control to the buyer; and •Work to be completed is either, easily measurable and accrued or is not significant in relation to the overall value of the contract.