AnnualReport

otes To The Consolidated Financial Statements

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

As At 31 December 2016

ANNUAL REPORT

2016

Ijara payables

Ijara payable represents the amount payable on a deferred settlement basis for assets purchased under ijara

and leasing arrangements. Ijara payable is stated at the aggregate of the minimum lease payment due, net of

any deferred costs.

Accounts payable and other credit balances

Liabilities are recognised for amounts to be paid in the future for goods or services received, whether billed

by the supplier or not.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or

expires. Where an existing financial liability is replaced by another from the same lender on substantially

different terms, or the terms of an existing liability are substantially modified, such an exchange or modification

is treated as a derecognition of the original liability and the recognition of a new liability, and the difference

in the respective carrying amounts is recognised in the consolidated statement of income.

(iv) Offsetting of financial instruments

Financial assets and liabilities are offset and net amount is reported in the consolidated statement of financial

position when the Group has currently legal enforceable right to offset and intends to settle either on a net

basis or to realise the asset and settle the liability simultaneously.

Fair value measurement

The Group measures financial instruments, such as, financial asset available-for-sale and non-financial assets,

at fair value at each consolidated statement of financial position date. Fair value is the price that would be

received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at

the measurement date. The fair value measurement is based on the presumption that the transaction to sell the

asset or transfer the liability takes place either:

• In the principal market for the asset or liability; or

• In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to the Group. The fair value of an asset

or a liability is measured using the assumptions that market participants would use when pricing the asset or

liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate

economic benefits by using the asset in its highest and best use or by selling it to another market participant

that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data

are available to measure fair value, maximising the use of relevant observable inputs and minimising the use

of unobservable inputs.

Fair value measurement of financial instruments

Fair values for financial instruments traded in active markets are based on closing bid prices. For all other

financial instruments including financial instruments for which the market has become inactive, the fair

value is determined by using appropriate valuation techniques. Valuation techniques include the fair value

derived from recent arm’s length transaction, comparison to similar instruments for which market observable

prices exist, discounted cash flow method or other relevant valuation techniques commonly used by market

participants. For investments in equity instruments, where a reasonable estimate of fair value cannot be

determined, the investment is carried at cost.