Page 78 - A&T BANK ANNUAL REPORT 2012

GENERAL INFORMATION
CORPORATE MANAGEMENT
FINANCIAL INFORMATION
ARAP TÜRK BANKASI ANONİM ŞİRKETİ
UNCONSOLIDATED FINANCIAL REPORT
AS OF 31 DECEMBER 2012
(Currency: Thousands of Turkish Lira (“TL”) unless otherwise stated)
Convenience Translation of Consolidated Financial
Report Originally Issued in Turkish
See Note on I. in Section Three
SECTION THREE
ACCOUNTING POLICIES
I. Explanations for basis of presentation
As per the Article 37 of “Accounting and Recording Rules” of the Turkish Banking Law no. 5411 published on the Official
Gazette no. 25983 dated 1 November 2005 and became effective, the Bank keeps its accounting records and prepares
its unconsolidated financial statements and the related footnotes in accordance with accounting and valuation standards
described in “Regulation on Accounting Applications for Banks and Safeguarding of Documents” published by the Banking
Regulation and Supervision Agency (“BRSA”) and effective since 1 November 2006, Turkish Accounting Standards (“TAS”),
Turkish Financial Reporting Standards (“TFRS”) and the related statements and guidance (collectively “Reporting Standards”)
published by Turkish Accounting Standards Board (“TASB”). The Bank maintains its books of account in Turkish Lira (TL).
As of 2 November 2011 as published in the Official Gazette, the addition of Article 1 of Law No. 2499 which is the establishment
article of TASB has been revoked by Decree Law No. 660 and the establishment of the Public Oversight Accounting and
Auditing Standards Board (“the Authority”) has been decided by the Council of Ministers. According to the provisory Article 1
of Decree Law, until the standards and regulations released by the Authority come into force, current existing regulations will
be applied regarding these issues. As of reporting period end, this situation does not cause any change in ‘Primary Basis of
Presentation’.
The accompanying financial statements are prepared in Thousand Turkish Lira in accordance with the cost basis except for the
financial assets at fair value through profit or loss, derivative financial assets and liabilities held for trading purpose and assets
available for sale, which are presented on a fair value basis.
For a correct perception of the financial statements, the accounting policies and valuation principles are explained in Notes No.
II and XXIII.
Additional paragraph for convenience translation to English
The differences between accounting principles, as described in the preceding paragraphs, and the accounting principles
generally accepted in countries, in which the accompanying financial statements are to be distributed, and International
Financial Reporting Standards (“IFRS”), may have significant influence on the accompanying financial statements. Accordingly,
the accompanying financial statements are not intended to present the financial position and results of operations in
accordance with the accounting principles generally accepted in such countries and IFRS.
II. Information on strategy for the use of financial instruments and foreign currency transactions
The Bank’s core business operation is banking activities including corporate banking, commercial banking, retail banking and
security transactions (treasury transactions) together with international banking services. The Bank uses financial instruments
intensively because of the nature of the Bank. The main funding resources are deposits, borrowing and equity and these
resources are invested in qualified financial assets. The Bank follows the utilization of resources and the risk and return for the
investments in various financial assets through an effective asset and liability management strategy.
The transactions in foreign currency are recorded in accordance with TAS 21 – Effects of Exchange Rate Changes. Related gain
and loss occurred due to the changes in exchange rates resulted by the foreign currency transactions are translated into TL
over the effective exchange rate prevailing at the date of the transaction and is recorded accordingly. At the end of the related
periods, foreign currency assets and liability balances outstanding are translated into Turkish Lira over the Bank’s exchange
rates prevailing at the balance sheet date and the resulting exchange rate differences are accounted as foreign exchange gains
and losses.