60
61
KUWAI
NOTES
For the ye
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T ENERGY
TO THE CO
ar ended 31 D
SIGNIFICA
usiness com
he acquiree
ecognition un
or non-curren
on-current A
osts to sell.
f the initial a
hich the co
ccounting is
elow), or ad
nd circumsta
ecognised as
he measurem
omplete info
o a maximum
here a bus
cquired entit
nd the result
rising from i
quity are re
ppropriate if
n accordance
iabilities are
llocated as th
herefore, goo
nterests in jo
joint ventu
conomic acti
ecisions rela
haring contro
here a Grou
hare of jointl
n the financia
xpenses incu
ccrual basis.
nd its share
ssociated wit
oint venture
as an interes
ontrolled ent
nd expenses
inancial state
here the G
liminated to
plc GROU
NSOLIDAT
ecember 201
NT ACCOUN
binations (co
’s identifiabl
der IFRS 3 (
t assets (or d
ssets Held fo
ccounting for
mbination oc
incomplete. T
ditional assets
nces that exis
at that date.
ent period
rmation abou
of one year.
iness combin
y are remeasu
ing gain or l
nterests in the
classified to
that interest i
with norma
ascribed fair v
e fair value a
dwill does no
int ventures
re is a cont
vity that is su
ting to the a
l.
p entity und
y controlled a
l statements
rred directly
Income from
of joint ventu
h the transact
arrangements
t are referred
ities using pro
of jointly con
ments on a lin
roup transac
the extent of t
P
ED FINAN
1
TING POL
ntinued)
e assets, liab
revised 2008)
isposal group
r Sale and D
a business c
curs, the Gr
hose provisi
or liabilities
ted as at the a
is the period
t facts and cir
ation is ach
red to fair va
oss, if any, is
acquiree prio
the consolid
s disposed of.
l oil explora
alues, and th
ttributable to
t normally ari
ractual arran
bject to joint
ctivities of th
ertakes its ac
ssets and any
of the relevan
in respect of
the sale or us
re expenses,
ions will flow
that involve
to as jointly
portionate co
trolled entiti
e-by-line bas
ts with its j
he Group’s in
CIAL STAT
ICIES (CON
ilities and c
are recognis
s) that are cla
iscontinued O
ombination i
oup reports p
onal amounts
are recognise
cquisition da
from the da
cumstances t
ieved in stag
lue at the acqu
recognised i
r to the acqu
ated stateme
tion and pro
e balance of t
the oil and g
se on acquisi
gement wher
control, that i
e joint ventu
tivities under
liabilities in
t entity and c
interests in j
e of the Grou
are recognise
to/from the G
the establish
controlled e
nsolidation
.
T
es are combin
is.
ointly contro
terest in the j
EMENTS
TINUED)
ontingent liab
ed at their fai
ssified as held
perations”
,
s incomplete
rovisional am
are adjusted
d, to reflect
te that, if kno
te of acquisi
hat existed as
es, the Grou
isition date (
n the consoli
isition date th
nt of incom
duction indu
he fair value
as properties
tions.
eby the Gro
s when the str
re require th
joint venture
curred jointly
lassified acco
ointly contro
p’s share of th
d when it is
roup and the
ment of a sep
ntities. The G
he Group’s s
ed with the
lled entities,
oint venture.
ilities that m
r value at the
for sale in a
which are me
by the end o
ounts for th
during the m
new informat
wn, would ha
tion to the d
at the acquis
p’s previous
i.e. the date th
dated stateme
at have previo
e, where su
stry practice,
of the conside
and related h
up and other
ategic financi
e unanimous
arrangement
with other v
rding to their
lled assets ar
e output of jo
probable that
ir amount can
arate entity i
roup reports
hare of the as
equivalent ite
unrealised p
eet the con
acquisition d
ccordance wi
asured at fair
f the reportin
e items for
easurement p
ion obtained
ve affected th
ate the Grou
ition date and
ly-held intere
e Group attai
nt of income
usly been rec
ch treatment
identifiable
ration given
ydrocarbon re
parties und
al and operat
consent of t
s directly, the
enturers are r
nature. Liab
e accounted
intly controll
the economi
be measured
n which each
its interests
sets, liabilitie
ms in the con
rofits and l
13
ditions for
ate, except
th
“
IFRS 5
value less
g period in
which the
eriod (see
about facts
e amounts
p receives
is subject
sts in the
ns control)
. Amounts
ognised in
would be
assets and
is typically
serves and
ertake an
ing policy
he parties
Group’s
ecognised
ilities and
for on an
ed assets,
c benefits
reliably.
venturer
in jointly
s, income
solidated
osses are
KUWAIT ENERGY plc GROUP
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
14
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial assets
All financial assets are recognised and derecognised on a trade date where the purchase or sale of a financial
asset is under a contract whose terms require delivery of the financial asset within the timeframe established
by the market concerned, and are initially measured at fair value, plus transaction costs.
Finan
cial assets are classified as “cash and cash equivalents”, “trade and other receivables”
and “h
eld to
maturity investment”.
The classification depends on the nature and purpose of the financial assets and is
determined at the time of initial recognition.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of
allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts
estimated future cash receipts (including all fees on points paid or received that form an integral part of the
effective interest rate, transaction costs and other premiums or discounts) through the expected life of the
financial asset, or, where appropriate, a shorter period to the net carrying amount on initial recognition.
Cash and cash equivalents
Cash and cash equivalents in the consolidated statement of cash flows include cash, bank balances and short-
term deposits with an original maturity of three months or less.
Trade and other receivables
Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised
cost using the effective interest method, less any impairment. Interest income is recognised by applying the
effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
Appropriate allowances for estimated irrecoverable amounts are recognised in the consolidated statement of
income when there is objective evidence that the asset is impaired.
Held to maturity investments
Bonds with fixed or determinable payments and fixed maturity dates that the Group has the positive intent and
ability to hold to maturity are classified as held to maturity investment. Held to maturity investments are
measured at amortised cost using the effective interest method less any impairment, with revenue recognised
on an effective yield basis.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each consolidated balance sheet date. Financial
assets are impaired where there is objective evidence that, as a result of one or more events that occurred after
the initial recognition of the financial asset, the estimated future cash flows of the asset have been impacted.
For trade receivables, objective evidence of impairment could include: (i) significant financial difficulty of the
issuer or counterparty; or (ii) default or delinquency in interest or principal payments; or (iii) it becoming
probable that the borrower will enter bankruptcy or financial re-organisation.
For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired
individually are subsequently assessed for impairment on a collective basis. Objective evidence of impairment
for a portfolio of receivables could include the Group
’s past experience of collecting payments, an increase in
the number of delayed payments in the portfolio past the average credit period of 60 days, as well as
observable changes in national or local economic conditions that correlate with default on receivables.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the
asset’s carrying amount and the present value of
estimated future cash flows, discounted at the financial asset’s
original effective interest rate.
Kuwait Energy Plc Group
Notes To The Consolidated Financial Statements
For The Year Ended 31 December 2011
Kuwait Energy Plc Group
Notes To The Consolidated Financial Statements
For The Year Ended 31 December 2011
