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GB Auto and its subsidiaries (S.A.E.)
Notes to the consolidated financial statements For the financial Year ended December 31, 2014
(In the notes all amounts are shown in Thousand Egyptian Pounds unless otherwise stated)
Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value
through profit or loss.
Financial assets carried at fair value through profit or loss are initially recognised at fair value and transaction costs
are expensed in the income statement.
Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have
been transferred and the Group has transferred substantially all risks and rewards of ownership.
At the balance sheet date, available-for-sale financial assets and financial assets at fair value through profit or loss
are subsequently carried at fair value. Held to maturity, loans and receivables are carried at amortised cost using the
effective interest method.
Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ cat-
egory are recognized in the income statement in the year which they arise. Dividend income from financial assets at
fair value through profit or loss is
recognised in the income statement as part of other income when the Group has the right to receive these dividends.
Changes in the fair value of monetary securities debt instruments (bonds, treasury bills) denominated in a foreign
currency and classified as available-for-sale are analysed between translation differences resulting from changes in
amortised cost of the security and other changes in the carrying amount of the security. The translation differences
on monetary securities are recognised in the income statement, while translation differences on non-monetary se-
curities are recognised in equity. Changes in the fair value of monetary and non-monetary securities classified as
available-for-sale are recognised in equity.
Interest on available-for-sale securities (bonds, treasury bills) calculated using the effective interest method is rec-
ognised in the income statement as part of financial income. Dividends on available-for-sale equity instruments are
recognised in the income statement as part of other income when the Group has the right to receive these dividends.
The Group assesses at balance sheet date whether there is objective evidence that a financial asset or a Group of fi-
nancial assets are impaired.
When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recog-
nised in equity are included in the income statement as ‘gains or losses from investment securities’.
M. Trade receivables and notes receivable
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective inter-
est method, less provision for impairment. A provision for impairment of trade receivables is established when there is ob-
jective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables.
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation,
and default or delinquency in payments (more than granted credit limits) are considered indicators that the trade receivable
is impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of the
estimated future cash flows, discounted at the original effective interest rate used to determine the amortized cost. The
carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised
in the income statement. When a trade receivable is uncollectible, it is written off against the allowance account for trade
receivables. Subsequent recoveries of amounts previously written off are credited against ‘selling and marketing costs’ in the
income statement.
N. Cash and cash equivalent
In the consolidated balance sheet, bank overdrafts are shown within borrowings in current liabilities.
For the purposes of the consolidated cash flow statement presentation, cash and cash equivalents comprise cash on hand,
banks deposits held at call, banks deposits and treasury bills with original maturities of three months.
Ghabbour Auto | 2014 ANNUAL REPORT
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