AnnualReport

ANNUAL REPORT

2016

otes To The Consolidated Financial Statements

AL MAZAYA HOLDING K.S.C.P. AND ITS SUBSIDIARIES

As At 31 December 2016

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition

date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability

will be recognised in accordance with IAS 39 either in consolidated statement of income or as a change to other

comprehensive income. If the contingent consideration is classified as equity, it will not be remeasured. Subsequent

settlement is accounted for within equity. In instances where the contingent consideration does not fall within the

scope of IAS 39, it is measured in accordance with the appropriate IFRS.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the

amount recognised for non-controlling interest over the Group’s net identifiable assets acquired and liabilities

assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is

recognised in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of

impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the

Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets

or liabilities of the acquiree are assigned to those units.

Where goodwill forms part of a cash-generating unit (group of cash generating units) and part of the operations

within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying

amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in

this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-

generating unit retained.

Financial instruments – initial recognition and subsequent measurement

(i) Financial assets

Initial recognition and measurement

Financial assets within scope of IAS 39 are classified as loans and receivables, financial assets available-for-sale. The

Group determines the appropriate classification of each instrument at initial recognition.

All financial assets are recognised initially at fair value plus, in the case of investments not at fair value through profit

or loss, directly attributable transaction costs.

Purchase or sale of financial assets that require delivery of assets within a time frame established by regulation or

convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Group

commits to purchase or sell the asset.

The Group›s financial assets include bank balances and cash, accounts receivable and other debit balances and

financial assets available-for-sale.

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

Cash and bank balances

For the purpose of the consolidated statement of cash flows, cash and bank balances consist of cash in hand and bank

balances, net of restricted cash balances.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted

in an active market. After initial recognition, loans and receivables are carried at amortised cost using the effective

interest rate method, less impairment losses, if any. Amortised cost is calculated by taking into account any discount

or premium arising on acquisition and fees or costs that are an integral part of the interest rate method.