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

The Group’s investment in its associate is accounted for using the equity method. Under the equity method, the

investment in the associate is carried in the consolidated statement of financial position at cost plus post acquisition

changes in the Group’s share of net assets of the associate. Unrealised gains and losses resulting from transactions

between the Group and the associate are eliminated to the extent of the interest in the associate.

The Group recognises in the consolidated statement of income its share of the total recognised profit or loss of

the associate from the date that influence or ownership effectively commenced until the date that it effectively

ceases. Distributions received from an associate 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 associate arising from changes in

the associate’s equity that have been recognised in the associate’s statement of comprehensive income.

The Group’s share of those changes is recognised directly in equity. Unrealised gains on transactions with an

associate are eliminated to the extent of the Group’s share in the associate. Unrealised losses are also eliminated

unless the transaction provides evidence of impairment in the asset transferred.

An assessment of investment in an associate is performed when there is an indication that the asset has been

impaired, or that impairment losses recognised in prior years no longer exist. Whenever impairment requirements

of IAS 36, indicate that investment in an associate may be impaired, the entire carrying amount of investment is

tested by comparing its recoverable amount with its carrying value.

The difference in reporting dates of the associates and the Group is not more than three months. Adjustments are

made for the effects of significant transactions or events that occur between that date and the date of the Group’s

consolidated financial statements. The associate’s accounting policies conform to those used by the Group for like

transactions and events in similar circumstances.

Upon loss of significant influence over the associate, the Group measures and recognises any retaining investment

at its fair value. Any differences between the carrying amount of the associate upon loss of significant influence

and the fair value of the remaining investment and proceeds from disposal are recognised in the consolidated

statement of income.

Investment properties

Investment properties comprises developed property and property under construction or re-development held to

earn rentals or for capital appreciation or both. Property held under a lease is classified as investment properties

when the definition of an investment property is met.

Investment properties is measured initially at cost including transaction costs. Transaction costs include transfer

taxes, professional fees for legal services and initial leasing commissions to bring the property to the condition

necessary for it to be capable of operating. The carrying amount also includes the cost of replacing part of an

existing investment property at the time that cost is incurred if the recognition criteria are met.

Subsequent to initial recognition, investment property is stated at fair value. Gains or losses arising from changes in

the fair values are included in the consolidated statement of income in the year in which they arise.

Investment property is derecognised when it has been disposed of or permanently withdrawn from use and no

future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of investment

property are recognised in the consolidated statement of income in the year of retirement or disposal.

Gains or losses on the disposal of investment property are determined as the difference between net disposal

proceeds and the carrying value of the asset.

Transfers are made to investment property when, and only when, there is a change in use, evidenced by the end

of owner occupation or commencement of an operating lease. Transfers are made from investment property when,

and only when, there is a change in use, evidenced by commencement of owner occupation or commencement

of development with a view to sale.