Page 71 - 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)

(viii) Leases
Critical judgements required in the application of IFRS 16 include, among others, the
following:

▶ Identifying whether a contract (or part of a contract) includes a lease;
▶ Determining whether it is reasonably certain that an extension or termination
option will be exercised;
▶ Classification of lease agreements (when the entity is a lessor);

▶ Determination of whether variable payments are in-substance fixed;
▶ Establishing whether there are multiple leases in an arrangement,.

▶ Determining the stand-alone selling prices of lease and non-lease components.

b) Estimates and assumptions:
The key assumptions concerning the future and other key sources of estimation
uncertainty at the end of the financial position date that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within the next
financial year are discussed below.

(i) Useful lives of depreciable assets
The Group reviews its estimate of useful lives of depreciable assets at each reporting
date based on the expected utility of assets. Uncertainties in these estimates mainly
relate to obsolescence and changes in operations.

(ii) Provision for allowance for expected credit losses and inventories
The extent of provision for expected credit losses and inventories involves estimation
process. Provision for expected credit losses is based on a forward looking ECL
approach as explained in Note 2(d). Bad debts are written off when identified. The
carrying cost of inventories is written down to their net realizable value when the
inventories are damaged or become wholly or partly obsolete or their selling prices
have declined. The benchmarks for determining the amount of provision or write-
down include ageing analysis, technical assessment and subsequent events. The
provisions and write-down of accounts receivable and inventories are subject to
management approval.

(iii) Revaluation of leasehold land
The Group measures leasehold land at revalued amounts with changes in fair value
being recognized in other comprehensive income. The Group engaged independent
valuation specialist to assess fair value at the reporting date. Leasehold land was
valued by reference to market based evidence, using comparable prices adjusted for
specific market factors such as nature, location and condition of the property.

(iv) Valuation of investment properties
The Group carries its investment properties at fair value, with change in fair values being
recognized in consolidated statement of profit or loss. The fair value of investment
property is determined by real estate valuation experts using recognized valuation

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