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4 Use of judgement and estimates
In preparing the consolidated financial statements in accordance with Egyptian Accounting Standards (EAS), management
has made judgements, estimates and assumptions that affect the application of the Group’s accounting policies and the re-
ported amounts of assets, liabilities, income and expenses. These estimates and assumptions are based on past experience and
various factors. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
The recognition of the change in accounting estimates in the period inwhich the change in estimate, if the change affects only
that period, or in the period of change and future periods if the change affects both. \
A Measurement of fair value
The fair value of financial instruments determines based on the market value of a financial instrument or similar financial
instruments at the date of the financial statements without deducting any estimate future costs of sale. The financial asset
values determine at current prices for the purchase of those assets, while determining the value of financial liabilities at cur-
rent prices, which could be settled by those commitments.
In the absence of an active market to determine the fair value of financial instruments, the fair value is estimated using vari-
ous valuation techniques, taking into consideration the transactions price that has recently or be guided by the current fair
value of other instruments which is substantially similar. Or the use of discounted cash f low or any other evaluating method
that leads to results can rely on it.
Whenusing the discounted cash f lowmethod as away for the evaluation, the future cash f lows are estimated based on the best
estimates of management. And determined the discount rate used in the prevailing market price at the date of the financial
statements of financial instruments are similar in nature and terms.
5 Operating Segments
The Group has the following four operational segments, which are its reportable segments to top management. These
segments offer different products and services, and are managed separately because they require different technology
and marketing strategies.
• The following summery describes the operations for each reportable segments:
Reportable segment
Operations
Passenger car
Trading, distributing andmarketing for all kinds of passenger cars, whether locally
manufactured or imported.
Buses and trucks
Trading, distributingandmarketing for all kindsofheavy trucks, semi-trucks, buses,
mini buses,microbuses, agriculture tractors,whether locallymanufacturedor imported.
2 & 3Wheels
Trading, distributing andmarketing for all kinds of 2 & 3Wheels, whether locally
manufactured or imported.
Other Operations
Trading spare parts, and its accessories whether locallymanufactured or imported,
tires for vehicles and equipment whether locallymanufactured or imported. export
activities, selling locallymanufactured and imported products for cash, on credit
or through finance leasing andmicrofinance. and trade in all goods including light
truck and sale by instalments and provide services of factoring and nonbanking
financial services. The factoring services intended to buy existing and future rights
of sellers of goods and services and provide related services.
2016 ANNUAL REPORT
72
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)