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ANNUAL REPORT
2016
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otes To The Consolidated Financial Statements
AL MAZAYA HOLDING K.S.C.P. AND ITS SUBSIDIARIES
As At 31 December 2016
The fair value of financial instruments carried at amortised cost, other than short-term in nature is estimated
by discounting the future contractual cash flows at the current market interest rates for similar financial
instruments.
Fair value measurement of non-financial instruments
Fair values of non-financial instruments are measured based on valuation provided by independent valuers.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the
fair value measurement as a whole:
• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable;
• Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
For assets and liabilities that are recognised in the consolidated financial statements on a recurring basis,
the Group determines whether transfers have occurred between Levels in the hierarchy by re-assessing
categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at
the end of each reporting period.
Interest in joint venture
The Group has investment in joint venture, which is a jointly controlled entity, whereby the venturer have
a contractual arrangement that establishes joint control over the economic activities of the entities. The
arrangement requires unanimous agreement for financial and operating decisions among the venturers.
The Group recognises its interest in the joint venture using the equity method. Under the equity method,
investment in a joint venture is initially recognised at cost and adjusted thereafter for the post-acquisition
change in the Group’s share of net assets of the joint venture. Any goodwill arising on the acquisition of the
Group’s interest in a jointly control entity is accounted for in accordance with the Group’s accounting policy
for goodwill arising on the acquisition of joint venture.
The Group recognises in the consolidated statement of income its share of the total recognised profit or loss
of the joint venture from the date that influence or ownership effectively commenced until the date that it
effectively ceases. Distributions received from a joint venture 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 joint
venture arising from changes in the joint venture’s equity that have not been recognised in the joint venture’s
statement of income. The Group’s share of those changes is recognised directly in equity. Unrealised gains
on transactions with a joint venture are eliminated to the extent of the Group’s share in the joint venture.
Unrealised losses are also eliminated unless the transaction provides evidence of impairment in the asset
transferred.
Investment in an associate
An associate is an entity over which the Group has significant influence. Significant influence is the power
to participate in the financial and operating policy decisions of the investee, but is not control or joint
control over those policies. The considerations made in determining significant influence are similar to those
necessary to determine control over subsidiaries.
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