Page 70 - 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)

(iii) Provision for expected credit losses and inventories
The determination of the recoverability of the amount due from customers and the
marketability of the inventories and the factors determining the impairment of the
receivable and inventories involve significant judgment.

(iv) Classification of land
Upon acquisition of land, the Group classifies the land into one of the following
categories, based on the intention of the management for the use of the land:
a) Properties under development
When the intention of the Group is to develop land in order to sell it in the future,
both the land and the construction costs are classified as properties under
development.
b) Work in progress

When the intention of the Group is to develop a land in order to rent or to occupy
it in the future, both the land and the construction costs are classified as work in
progress.

c) Properties held for trading
When the intention of the Group is to sell land in the ordinary course of business,
the land is classified as properties held for trading.

d) Investment properties
When the intention of the Group is to earn rentals from land or hold land for capital
appreciation or if the intention is not determined for land, the land is classified as
investment property.

(v) Classification of financial assets
On acquisition of a financial asset, the Group decides whether it should be classified
as at “amortized cost”, “FVTPL” or “FVOCI”. IFRS 9 requires all financial assets, except
equity instruments and derivatives, to be assessed based on a combination of the
Group’s business model for managing the assets of the instrument’s contractual
cash flow characteristics. The Group follows the guidance of IFRS 9 on classifying its
financial assets as explained in Note 2(d).

(vi) Taxes
The Group is subject to income taxes in other jurisdictions. Significant judgment is
required in determining the provision for income taxes. There are many transactions
and calculations for which the ultimate tax determination is uncertain during the
ordinary course of business for the Group.
(vii) Control assessment
When determining control over an investee, management considers whether the
Group has a ‘de facto’ power to control an investee if it holds less than 50% of the
investee’s voting rights. The assessment of the investee’s relevant activities and the
ability to use the Group’s power to affect the investee’s variable returns requires
significant judgment.

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