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 93 ANNUAL REPORT 2018 (All amounts are in Kuwaiti Dinars) The preparation of consolidated financial statements in conformity with International Financial Reporting Standards requires management to make judgments, estimates and assumptions in the process of applying the Group’s accounting policies. Significant accounting judgments, estimates and assumptions are disclosed in Note (2- dd). Standards and Interpretations issued and effective The accounting policies used in the preparation of these consolidated financial statements are consistent with those used in the previous year except for the changes due to implementation of the following new and amended International Financial Reporting Standards as of January 1, 2018: IFRS 9 - Financial Instruments The standard, effective for annual periods beginning on or after January 1, 2018, replaces the existing guidance in IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 specifies how an entity should classify and measure its financial instruments and includes a new expected credit loss model for calculating impairment of financial assets and the new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from IAS 39. Kindly refer to Note (2 - d) for the effect of initially applying IFRS 9. IFRS 15 - Revenue from contracts with customers The standard, effective for annual periods beginning on or after January 1, 2018, establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It replaces the following existing standards and interpretations upon its effective date: • IAS 18 – Revenue, • IAS 11 – Construction Contracts, • IFRIC 13 – Customer Loyalty Programs, • IFRIC 15 – Agreements for the Construction of Real Estate, • IFRIC 18 – Transfers of Assets from Customers, and, • SIC 31 – Revenue-Barter Transactions Involving Advertising Services This standard applies to all revenue arising from contracts with customers, unless the contracts are in the scope of other standards, such as IAS 17. Its requirements also provide a model for the recognition and measurement of gains and losses on disposal of certain non-financial assets, including property, plant and equipment and intangible assets. The standard will also specify a comprehensive set of disclosure requirements regarding the nature, extent and timing as well as any uncertainty of revenue and corresponding cash flows with customers. Kindly refer to Note (2 - r) for the effect of initially applying IFRS 15. IFRIC 22 - Foreign Currency Transactions and Advance Consideration The interpretation will be effective for annual periods beginning on or after January 1, 2018 and clarifies that in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a nonmonetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognizes the non-monetary asset or nonmonetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine a date of the transactions for each payment or receipt of advance consideration. The revision do not have any material impact on the consolidated financial statements. Amendments to IAS 28 – Investment in Associates and Joint Ventures The amendments clarify that: a) An entity that is a venture capital organization, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss.