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2 Sales – retail and Companies
The Group operates a chain of showrooms for selling, and sales of goods are recognisedwhen a Group entity has delivered
Instalment sales revenues are those that require the payment of the value in instalments that are charged at sale price ex-
cluding interest as revenues on the sales date. The selling price is the present value of the instalments and is determined by
discounting the value of the instalments due using the interest rate applicable. The deferred interest income is charged as a
revenue when due and on the basis of thematching principle, taking into account the applied interest rate on the transaction.
3 Sales of services – maintenance
The Group’s entities provide maintenance service that measure on basis of labour hours and spare parts. The revenue from
maintenance service is recognisedwhen the service is done.
4 Financial Lease Contracts
Lease income is recognized on the basis of the rate of return on the lease contract plus an amount equal to the depreciation
charge for the period and the difference between the recognized lease revenue and the gross receivable is deferred in the bal-
ance sheet in the same financial period in a separate account either debit or credit and is offset against the net book value of the
leased asset on termination of the lease contract.
5 Interest income
Interest income is recognized on a time proportion basis, as it accrues using the effective interest rate method. When an im-
pairment exists in the debit balances resulting from recognizing the interest, hence the book value is reduced to the value
expected to be collected.
6 Dividend income
Dividend income is recognisedwhen the right to receive payment is established.
E Employee benefit
1 Short – term employee benefits
Short
‑
termemployee benefits are expensed as the related service is provided. A liability is recognised for the amount expected
tobe paid if theGrouphas a present legal or constructive obligation topay this amount as a result of past service providedby the
employee and the obligation can be estimated reliably.
2 Share – based payment arrangements
The grant
‑
date fair value of equity
‑
settled share
‑
based payment arrangements granted to employees is generally recognised
as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an
expense is adjusted to ref lect the number of awards for which the related service and non
‑
market performance conditions are
expected to bemet, such that the amount ultimately recognized is based on the number of awards thatmeet the related service
and non
‑
market performance conditions at the vesting date.
For share
‑
based payment awards with non
‑
vesting conditions, the grant
‑
date fair value of the share
‑
based payment is mea-
sured to ref lect such conditions and there is no true
‑
up for differences between expected and actual outcomes.
3 Define contribution plans
Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contribu-
tions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
The Group pays contributions to the Public Authority for Social Insurance for their employees based on the rules of the social
insurance lawno 79 for the year 1975. The employees and employers contribute under this lawwithafixedpercentage ofwages.
The Group’s commitment is limited to the value of their contribution. And the Group’s contribution amount expensed in profits
and losses according to accrual basis.
2016 ANNUAL REPORT
98
GB Auto (S.A.E.)
Notes to the consolidated financial statements for the financial year ended December 31, 2016
(In thenotes all amounts are shown inThousandEgyptianPounds unless otherwise stated)