Page 58 - JTC-Annual Report-2025-Eng

JTC Logistics Transportation & Stevedoring Company K.S.C.P
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2025
(All amounts are in Kuwaiti Dinars)

deposits placed with banks having a contractual maturity of more than three months
and are subject to an insignificant risk of changes in value.

ii. Trade receivables
Receivables are amounts due from customers for services performed in the ordinary
course of business and is recognized initially at fair value and subsequently measured
at amortized cost using the effective interest method, less allowance for expected
credit losses.

Equity instruments at FVOCI
Upon initial recognition, the Group may elect to classify irrevocably some of its equity
instruments at FVOCI when they are neither held for trading nor a contingent consideration
arising from a business combination. Such classification is determined on an instrument-
by- instrument basis.
Equity investments at FVOCI are subsequently measured at fair value. Changes in fair
values including foreign exchange component are recognized in other comprehensive
income and presented in the fair value reserve as part of equity. Cumulative gains and
losses previously recognized in other comprehensive income are transferred to retained
earnings on derecognition. Gains and losses on these equity instruments are never recycled
to a consolidated statement of profit or loss. Dividends are recognized in consolidated
statement of profit or loss when the right of the payment has been established, except
when the Group benefits from such proceeds as a recovery of part of the cost of the
instrument, in which case, such gains are recorded in OCI. Equity instruments at FVOCI
are not subject to an impairment assessment. Upon disposal, cumulative gains or losses
are reclassified from fair value reserve to retained earnings in the statement of changes
in equity.
The Group classifies investments in quoted equity instruments under financial assets at
FVOCI in the consolidated statement of financial position.

IV. Derecognition
A financial asset (in whole or in part) is derecognized either when: the contractual rights to
receive the cash flows from the financial asset have expired; or the Group has transferred
its rights to receive cash flows from the financial asset and either (a) has transferred
substantially all the risks and rewards of ownership of the financial asset, or (b) has neither
transferred nor retained substantially all the risks and rewards of the financial asset, but
has transferred control of the financial asset. Where the Group has retained control, it
shall continue to recognize the financial asset to the extent of its continuing involvement
in the financial asset.

V. Impairment of financial assets
The Group recognizes an allowance for expected credit losses (ECL) for all debt instruments
not held at fair value through profit or loss.

ECLs are based on the difference between the contractual cash flows due in accordance
with the contract and all the cash flows that the Group expects to receive. The shortfall
is then discounted at an approximation to the asset’s original effective interest rate. The

56 JTC LogisTiCs TransporTaTion & sTevedoring Company K.s.C.p.