ZaraAnnual-English2016

2. Impairment of Assets
The carrying value of the Group’s assets mainly comprise of property and equipment and investment properties, amounted
to JD 169,692,390 at 31 December 2016.
Recoverability of these assets is dependent on assumptions about future room/services prices/rents, discount rates as well
as internal assumptions related to future occupancy levels and operating costs.
These estimates are particularly significant due to price and occupancy fluctuations, competition, assumed future services
and uncertain political and economic outlooks. The outcome of impairment assessments could vary significantly were
different assumptions applied.
How the Key Audit Matter was addressed
We utilised EY valuation specialists to assess the appropriateness of management’s recoverable value models used in the
impairment testing.
We reviewed the significant assumptions used in impairment testing for property and equipment, and investment
properties, specifically the room rate/service price, assumed occupancy/service levels and discount rate assumptions,
including consideration of the risk of management bias.
Refer to Notes 4 and 5 to the consolidated financial statements
Other information included in the Group’s 2016 annual report.
Other information consists of the information included in the annual report, other than the consolidated financial
statements and our auditor’s report thereon. Management is responsible for the other information.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements
or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information; we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Board of Directors and Those Charged with Governance for the Consolidated Financial
Statements
Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in
accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative
but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
56