Basic HTML Version
2. Foreign Operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition,
are translated at the exchange rates at the reporting date. The income and expenses of foreign operations are trans-
lated at the exchange rates at the dates of the transactions.
Foreign currency differences are recognised in OCI and accumulated in the translation reserve, except to the extent
that the translation difference is allocated to NCI.
When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint
control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to
profit or loss as part of the gain or loss on disposal.
If the Group disposes of part of its interest in a subsidiary but retains control, then the relevant proportion of the
cumulative amount is reattributed to NCI.
When the Group disposes of only part of an associate or joint venture while retaining significant influence or joint
control, the relevant proportion of the cumulative amount is reclassified to profit or loss.
C. Discontinued operation
A discontinued operation is a component of the Group’s business, the operations and cash flows of which can be
clearly distinguished from the rest of the Group.
Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria
to be classified as held‑for‑sale.
When an operation is classified as a discontinued operation, the comparative statement of profit or loss and OCI is
re‑presented as if the operation had been discontinued from the start of the comparative year.
D. Revenue
Revenue is measured at the fair value of the consideration received or receivable for the sale of goods and services in
the ordinary course of the Group’s activities. Revenue is shown net of sales tax, returns, rebates and discounts and
after eliminating sales within the Group.
The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future eco-
nomic benefits will flow to the Group and when specific criteria have been met for each of the Group’s activities as
described below. The amount of revenue is not considered to be reliablymeasurable until all contractual obligations
have been met. The Group bases its estimates on historical results, taking into consideration the type of customer,
the type of transaction and the specifics of each arrangement.
1. Sales – wholesale and showrooms
Sales of goods are recognisedwhen aGroup entity has deliveredproducts to thewholesaler, thewholesaler has full discre-
tion over the price to sell the products, and there is no unfulfilled obligation that could affect the wholesaler’s acceptance
of the products. Delivery does not occur until the products have been delivered either in theGroup entitywarehouse or in
the wholesalers’ locations depending on the agreements. Accordingly, the risks and benefits have been transferred to the
wholesaler, and either the wholesaler has accepted the products in accordance with the sales contract, the acceptance
provisions have lapsed, or theGrouphas objective evidence that all criteria for acceptancehavebeen satisfied.
No element of financing is deemed present as the sales are made on a short credit termbasis.
2. Sales – retail and companies
TheGroupoperates a chainof showrooms for selling, and sales of goods are recognisedwhenaGroupentityhas delivered
Instalment sales revenues are those that require the payment of the value in instalments that are charged at sale
price excluding 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 the matching principle, taking into account the applied
interest rate on the transaction.
3. Sales of services – maintenance
TheGroup’s entities providemaintenance service thatmeasure on basis of labour hours and spare parts.The revenue
frommaintenance service is recognised when 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 balance 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 ratemethod. When
an impairment 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 recognised when 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 to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past
service provided by 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 reflect 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 that meet 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
ismeasured to reflect such conditions and there is no true‑up for differences between expected and actual outcomes.
98 • 2017 ANNUAL REPORT
2017 ANNUAL REPORT • 99
GB Auto (S.A.E.)
Notes to the consolidated financial statements for the financial year ended December 31, 2017
(In the notes all amounts are shown in Thousand Egyptian Pounds unless otherwise stated)