REPORTING ENTITY
REPORTING ENTITY (Continued)
The Group reassesses whether or not it controls an investee if the facts and circumstances indicate that there are changes in one or more of the three elements of control. Consolidation of a subsidiary begins when the Group acquires control of the subsidiary and ceases when the Group loses control of the subsidiary. The assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the period are included in the consolidated financial statements from the date the Group acquires control to the date the Group ceases to control the subsidiary.
Profit or loss and any component of other comprehensive income (OCI) is attributed to the equity holders of the Group's parent company and non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group's accounting policies. All intra-group assets and liabilities, capital, income, expenses and cash flows related to transactions between members of the Group are completely eliminated during consolidation.
Reclassifies the parent's share of components previously recognized in other comprehensive income to the consolidated income statement or retained earnings, as applicable, as would be required if the Group had directly disposed of the related assets or liabilities.
Significant accounting policies
A change in ownership in a subsidiary, without loss of control, is treated as an equity transaction for accounting purposes.
Significant accounting policies (continued)
Significant accounting policies (continued) ii) IFRS 9 Financial Instruments (continued)
The following table explains the original measurement categories under IAS 39 and the new measurement categories under IFRS 9 for the Group's financial asset class as at 1 January 2018. The amount of expected credit losses reflects changes in credit risk since the initial recognition of belonging to the financial instrument. The assessment of whether the credit risk of the financial instrument has increased significantly since initial recognition is made by taking into account the change in default risk that occurs during the remaining life of the financial instrument.
When assessing whether the credit risk of a financial instrument has significantly increased since initial recognition, the Group compares the risk of non-payment of the financial instrument at the end of the reporting period with the risk of non-payment of the financial instrument as at the date of initial recognition. The measure of expected credit losses is a function of the probability of default, the loss given default (ie, the percentage of loss if default occurs) and the exposure given default. The estimate of probability of default is based on historical data adjusted with forward-looking information.
The cost of an acquisition is measured as the total of the consideration transferred, which is measured at fair value at the acquisition date, and the amount of any minority interest in the acquiree. For each business combination, the Group elects to measure the minority interest in the acquiree at fair value or at the proportionate share of the acquiree's identifiable net assets. If the business combination is realized in phases, the acquisition date fair value of the acquirer's previously held equity interest in the acquiree is revalued to the acquisition date fair value through the consolidated income statement.
Otherwise, the other contingent consideration is remeasured at fair value at each reporting date, and subsequent changes in the fair value of the contingent consideration are recognized in profit or loss. If the fair value of the net assets acquired exceeds the total consideration transferred, the Group reassesses whether it has correctly identified all assets acquired and all liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the revaluation still results in an excess of the fair value of the net assets acquired over the total consideration transferred, the gain is recognized in consolidated income.
For the purposes of impairment testing, goodwill acquired in a business combination is, from the date of acquisition, allocated to each of the Group's cash-generating units expected to benefit from the combination, whether they are other assets or liabilities of the purchase. assigned to those units. Goodwill disposed of in this circumstance is measured based on the relative values of the disposed operation and the retained portion of the cash-generating unit.
Significant accounting policies (continued) c) Investment in associates and joint ventures
Significant accounting policies (continued) d) Current versus non-current classification
Significant accounting policies (continued) e) Fair value measurement (continued)
Significant accounting policies (continued) h) Contract balances
Significant accounting policies (continued) j) Foreign currency translation (continued)
Significant accounting policies (continued) o) Intangible assets
A financial asset is measured at amortized cost if it meets both of the following conditions and is not classified per Dividends are recognized as income in the consolidated income statement, unless the dividend clearly represents a recovery of part of the investment's cost price. For all other financial assets, the Group considers the following to constitute an event of default, as historical experience indicates that receivables that meet one of the following criteria are generally uncollectible.
A financial instrument is determined to have low credit risk if: i) the financial instrument has a low risk of default, ii) the borrower has a strong ability to meet its contractual cash flow obligations in the short term and iii) adverse changes longer-term economic and business conditions may, but will not necessarily reduce the borrower's ability to meet its contractual cash flow obligations. The Group recognizes an impairment loss or reversals in the consolidated income statement for all financial instruments with a corresponding adjustment to their carrying amount through a loss provision account, except for investments in debt instruments measured at FVOCI, for which the loss The provision is included in the consolidated statement of comprehensive income and accumulated in the investment revaluation reserve, and does not reduce the carrying amount of the financial asset in the consolidated statement of financial position. For financial assets that are not classified at fair value through profit or loss, the Group assesses at each reporting date whether there is any objective evidence that such financial asset or group of financial assets is impaired .
A financial asset or a group of financial assets is considered to be impaired if and only if there is objective indication of impairment as a result of one or more events that are or have occurred after the initial recognition of the asset and a loss event has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. The present value of the estimated future cash flows is discounted using the financial asset's original effective interest rate. The accounting value of the asset is reduced by using a provision account, and the loss is recognized in the consolidated income statement.
If, in a subsequent year, the amount of the estimated impairment loss increases or decreases due to an event occurring after the impairment was recognized, the previously recognized impairment loss is increased or decreased by adjusting the provision account. Net realizable value is based on the estimated selling price in the ordinary course of business, less any further costs expected to occur on completion and disposal. r) Depreciation of non-financial assets. In the value-in-use assessment, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and asset-specific risks.
The Group bases the impairment calculation on detailed budgets and forecast calculations prepared separately for each of the Group's cash generating units to which the individual assets are allocated. Impairment losses are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amount of the other assets in the CGU on a pro rata basis.
Significant accounting policies (continued) r) Impairment of non-financial assets (continued)
Significant accounting policies (continued) u) Employees end of service benefits
The table also reconciles the summarized financial information to the carrying amount of the Group's interest in the participation. The Group's management has assessed in detail the book value of LG Shaker as of December 31, 2018. The facility agreements are secured by promissory notes and corporate and personal guarantees from the Group's shareholders.
The Group's income is derived from contracts with customers for the sale of products and services provided. The nature and effect of the implementation of IFRS 15 on the Group's financial statements are disclosed in Note 2. Other income for the year ended 31 December includes the following:. The Group's policy is to maintain a strong capital base in order to maintain the confidence of investors, creditors and the market and to support the future development of the business.
The company's board of directors has overall responsibility for establishing and overseeing the group's risk management framework. The board of directors has established an audit committee, which is responsible for developing and monitoring the Group's risk management policy. Risk management policies and systems are regularly reviewed to reflect changes in market conditions and the Group's activities.
The Group Audit Committee oversees how management monitors compliance with the Group's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risk faced by the Group. The Group's exposure to credit risk is mainly influenced by the individual characteristics of each customer. Market risk is the risk that changes in market prices – such as foreign exchange rates, interest rates and equity prices – will affect the Group's income or the value of its holdings of financial instruments.
Group management monitors such fluctuations and manages their effect on the consolidated interim financial statements accordingly. Borrowings are generally denominated in currencies that match the cash flows generated by the Group's underlying operations - primarily Saudi Arabian Riyal, but also US dollars and Jordanian dinars. The interest rate profile of the Group's interest-bearing financial instruments, as reported to the Group's management, is as follows.
The Group does not account for any fixed rate financial assets or financial liabilities at FVTPL.
