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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 financial liability is derecognized when the obligation under the liability is discharged or cancelled or
expires. When 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 recognized in consolidated statement of profit or loss.
If the modification is not substantial, the difference between of the carrying amount of the liability before
the modification; and the present value of the cash flows after modification should be recognized in profit
or loss as the modification gain or loss within other gains and losses.

d – 3) Offsetting of financial assets and liabilities:
Financial assets and financial liabilities are offset and the net amount reported in the consolidated
statement of financial position if, and only if, there is a currently enforceable legal right to offset the
recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle
the liabilities simultaneously.

e) Inventory:
Inventories are valued at the lower of cost or net realizable value after providing allowances for any obsolete or
slow-moving items. Costs comprise direct materials and where applicable, direct labor costs and those overheads
that have been incurred in bringing the inventories to their present location and condition. Cost is determined on
a weighted average basis.

Net realizable value is the estimated selling price in the ordinary course of business less the costs of completion
and selling expenses. Write-down is made for obsolete and slow-moving items based on their expected future
use and net realizable value.

f) Properties held for trading:
Properties acquired or being constructed for sale in the ordinary course of business, rather than to be held for
rental or capital appreciation, are held as properties held for trading and are measured at lower of cost or net
realizable value.

Cost includes freehold and leasehold rights for land, amount paid to contractors for construction, borrowing costs,
planning and design costs, cost of site preparation, professional fees for legal services, property transfer taxes,
construction overheads and other related costs.

Net realizable value is the estimated selling price in the ordinary course of business, based on market prices at
the reporting date and discounted for the time value of money if material, less costs to completion and the
estimated cost of sale. Non refundable commissions paid to sales or marketing agents on the sale of real estate
units are expensed when paid.

The cost of properties held for trading recognized in consolidated statement of profit or loss on disposal is
determined with reference to the specific cost incurred on the property sold and an allocation of any non-specific
costs based on the relative size of the property sold. Write down of properties held for trading is charged to other
operating expenses.

g) Investment properties:
Investment properties comprise completed property, property under construction or re-development and rights to
use real estate assets (Note 2 – v) that are held to earn rentals or for capital appreciation or both. Investment
properties are initially measured at cost including purchase price and transaction costs. Subsequent to initial
recognition, investment properties are stated at their fair value at the end of reporting period. Gains or losses
arising from changes in the fair value of investment properties are included in the consolidated statement of profit
or loss for the period in which they arise.

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