Notes to the Consolidated Financial Statements
19
Dar Al-Maal Al-Islami Trust
Annual Report 2013
the relevant activities of FIBE. DMI
therefore retains the position of a
49% shareholder with significant
influence and continues to account
for FIBE as an associated company
under the IFRS standard IAS 28
Investment in Associates.
IFRS 12, ‘Disclosures of interests
in other entities’ includes the
disclosure requirements for all forms
of interests in other entities including
joint arrangements, associates,
structured entities and other off
balance sheet vehicles. Effective
date 1 January 2013.
IFRS 13, ‘Fair value measurement’,
aims to improve consistency and
reduce complexity by providing
a precise definition of fair value
and a single source of fair value
measurement and disclosure
requirements for use across IFRSs.
The requirements, which are largely
aligned between IFRSs and US GAAP,
do not extend the use of fair value
accounting but provide guidance on
how it should be applied where its
use is already required or permitted
by other standards within IFRSs.
Effective date 1 January 2013.
Amendments to IAS 36, ‘Impairment
of assets’, on the recoverable
amount disclosures for non-
financial assets. This amendment
removed certain disclosures of the
recoverable amount of CGUs which
had been included in IAS 36 by the
issue of IFRS 13. The Group has
early adopted the amendments to
IAS 36 on 1 January 2013.
New standards,
amendments and
interpretations issued but
not effective for the financial
year beginning 1 January
2013 and not early adopted.
There are no IFRS or IFRIC
interpretations that were issued but
not effective for the financial year
beginning 1 January 2013 and
not early adopted that would be
expected to have a material impact
on the Group, unless otherwise
mentioned below.
IFRS 9 ‘Financial instruments’
addresses the classification,
measurement and recognition
of financial assets and financial
liabilities. It replaces the parts of IAS
39 that relate to the classification
and measurement of financial
instruments. IFRS 9 requires
financial assets to be classified
into two measurement categories:
those measured at fair value and
those measured at amortised cost.
The determination is made at initial
recognition. The classification
depends on the entity’s business
model for managing its financial
instruments and the contractual
cash flow characteristics of the
instrument. For financial liabilities,
the standard retains most of the
IAS 39 requirements. The main
change is that, in cases where the
fair value option is taken for financial
liabilities, the part of a fair value
change due to an entity’s own credit
risk is recorded in the consolidated
statement of comprehensive income
rather than in the consolidated
statement of income, unless this
creates an accountingmismatch. The
amendments also provide relief from
restating comparative information
and require disclosures (in IFRS 7) to
enable users of financial statements
to understand the effect of beginning
to apply IFRS 9.
In November 2013, IASB published
an amendment to IFRS 9 ‘Financial
Instruments’ incorporating its new
general hedge accounting model.
By this new phase of the project,
the standard becomes more
principle based, insures increased
eligibility of hedging instruments
and hedged items, amends the
qualifying criteria for applying hedge
accounting and requires increased
disclosures.
On 16 December 2011, the IASB
deferred the mandatory effective date
of IFRS 9 to 1 January 2017 at the
earliest. The Group is monitoring the
developments in order to assess the
impact on its financial statements.
IFRIC 21, ‘Levies’, sets out the
accounting for an obligation to pay
a levy that is not income tax. The
interpretation addresses what the
obligating event is that gives rise
to pay a levy and when should a
liability be recognised. The Group
is not currently subject to significant
levies so the impact on the Group is
not material.
There are no other IFRSs or IFRIC
interpretations that are not yet
effective that would be expected
to have a material impact on the
Group.
Consolidation
(a) Subsidiaries
Subsidiaries are all entities
(including structured entities) over
which the Group has control. The
Group controls an entity when
the Group is exposed to, or has
rights to, variable returns from its
involvement with the entity and has
the ability to affect those returns
through its power over the entity.
Subsidiaries are fully consolidated
from the date on which control is
transferred to the Group. They are
de-consolidated from the date on
which control ceases.
The Group applies the acquisition
method to account for business
combinations. The consideration
transferred for the acquisition of
a subsidiary is the fair values of
the assets transferred, the liabilities
incurred to the former owners
of the acquiree and the equity
interests issued by the Group. The
consideration transferred includes
the fair value of any asset or
liability resulting from a contingent
consideration
arrangement.
Identifiable assets acquired
and liabilities and contingent
liabilities assumed in a business
combination are measured initially
at their fair values at the acquisition
date. The Group recognises any
non-controlling interest in the
acquiree on an acquisition-by-
acquisition basis, either at fair
value or at the non-controlling
interest’s proportionate share of the
recognised amounts of acquiree’s
identifiable net assets.
Acquisition-related costs are
expensed as incurred.
If the business combination is
achieved in stages, the acquisition
date carrying value of the acquirer’s
previously held equity interest in
the acquiree is re-measured to fair
value at the acquisition date; any
gains or losses arising from such
re-measurement are recognised in
profit or loss.
