Consolidated Financial Statements 2022 · Page 86

Public Investment Fund and its subsidiaries 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 
(All amounts in million SAR unless otherwise stated) 
Classification: External Confidential 
83 
 
11. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued) 
 
 
 
Significant accounting policies that apply to investment in associates, joint ventures and joint operations 
(continued) 
Investment in associates and joint ventures (continued) 
 
The Group provides certain unsecured long-term loans to its associates and joint ventures, in the form of debt and/or equity instruments, 
the settlement of which is neither planned nor likely to occur in the foreseeable future. These debt or equity instruments, in substance, 
represent investment in associates and joint ventures and are treated as long term interests.  
 
The Groups applies IFRS 9 Financial Instruments to long term interests in an associate or joint venture to which the equity method is not 
applied but that, in substance, form part of the net investment in the associate or joint venture (long term interests). While applying this, 
the Group does not take into account any losses of the associate or joint venture, or any impairment losses on net investment, recognized 
as adjustments to the net investment in the associate or joint venture that arise from applying IAS 28 Investments in Associates and Joint 
Ventures.  
 
Losses recognized using the equity method in excess of the Group’s investment in equity are offset against the Group’s long-term 
interests in associate or a joint venture. When the Group’s share of losses exceeds its interest in associate or joint venture, the carrying 
amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued 
except to the extent that the Group has a constructive or legal obligation to contribute to such losses or has made payments on behalf 
of the investee. 
 
The group ceases to use the equity method to account for an investment in associate or joint venture because of a loss of significant 
influence or joint control or when the investment is classified as held for sale. Upon disposal of equity accounted investees that results 
in a loss of significant influence or joint control, any retained interest in the investee is remeasured to its fair value at that date and the 
fair value is regarded as its fair value on initial recognition as a financial asset in accordance with IFRS 9. The difference between the 
previous carrying amount of the equity accounted investee attributable to the retained interest and its fair value is recognized in the 
consolidated statement of profit or loss. In addition, the Group accounts for all amounts previously recognized in other comprehensive 
income in relation to equity accounted investee on the same basis as would be required if that associate and joint venture had directly 
disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognized in other comprehensive income by the equity 
accounted investees would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the 
gain or loss from equity to profit or loss (as a reclassification adjustment) when the equity method is discontinued. 
 
If the ownership interest in an associate or joint venture is reduced but significant influence or joint control is retained, only a 
proportionate share of the