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AL-MAZAYA HOLDING COMPANY - K.S.C. (PUBLIC)
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(All amounts are in Kuwaiti Dinar)

A liability is current when:
• It is expected to be settled in the normal operating cycle
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months after the reporting period or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period.

The Group classifies all other liabilities as non-current.

d) Financial instruments
The Group classifies its financial instruments as “financial assets” and “financial liabilities. Financial assets and
financial liabilities are recognized when the Group becomes a party to the contractual provisions of the
instruments.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual
arrangement. Interest, dividends, gains, and losses relating to a financial instrument classified as a liability are
reported as expense or income. Distributions to holders of financial instruments classified as equity are charged
directly to equity. Financial instruments are offset when the Group has a legally enforceable right to offset and
intends to settle either on a net basis or to realize the asset and settle the liability simultaneously.

Financial assets and financial liabilities carried on the consolidated statement of financial position include cash
and cash equivalents, term deposits, accounts receivable, advances to purchase properties, financial assets at
fair value through profit or loss, financial assets at fair value through other comprehensive income, Islamic bank
facilities , lease liabilities and accounts payable.

d – 1) Financial assets:

d- 1/1) Classification of financial assets
To determine their classification and measurement category, IFRS 9 requires all financial assets,
except equity instruments and derivatives, to be assessed based on a combination of the entity’s
business model for managing the assets and the instruments’ contractual cash flow
characteristics.

Business model assessment
The Group determines its business model at the level that best reflects how it manages groups
of financial assets to achieve its business objectives and in order to generate contractual cash
flows. That is, whether the Group’s objective is solely to collect the contractual cash flows from
the assets or is to collect both the contractual cash flows and cash flows arising from the sale of
assets. If neither of these is applicable (e.g. financial assets are held for trading purposes), then
the financial assets are classified as part of ‘Sell’ business model and measured at FVTPL. The
Group’s business model is not assessed on an instrument-by-instrument basis, but at a higher
level of aggregated portfolios.

Assessment of whether contractual cash flows are solely payments of principal and interest
(SPPI test)
Where the business model is to hold assets to collect contractual cash flows or to collect
contractual cash flows and sell, the Group assesses whether the financial instruments’ cash flows
represent Solely Payments of Principal and Interest (the ‘SPPI test’). ‘Principal’ for the purpose of
this test is defined as the fair value of the financial asset at initial recognition that may change
over the life of the financial asset (for example, if there are repayments of principal or amortization
of the premium/discount). The most significant elements of interest within a lending arrangement
are typically the consideration for the time value of money and credit risk.

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