Page 80 - 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
Financial derivative instruments are classified as financial assets held for trading unless they are stated as for hedging
purposes. Accounting of derivative financial assets is explained in III of Section Three.
The financial assets held for trading are initially recognized at cost which includes transaction costs. Subsequent to the initial
recognition financial assets held for trading are re-measured at their fair value. The gains and losses arising from the change
in fair value are recognized in the income statement. The interest income earned from financial assets held for trading is
recorded in the interest income and share profit is recorded in the dividends account.
Financial Assets Available-for-Sale
Financial assets available for sale are financial assets other than those classified as loans and receivables, financial assets held
to maturity and financial assets at fair value through profit or loss.
Debt securities classified as financial assets available-for-sale are subsequently re-measured at their fair values. Unrealized
gains and losses arising from changes in the fair value of securities classified as financial assets available for sale is reflected
in the equity marketable securities value increase fund. When these financial assets available for sale are disposed of or
collected the fair value differences accumulated under equity are transferred to the income statement.
Financial assets available for sale that have a quoted market price in an active market and whose fair values can be reliably
measured are carried at fair value. Financial assets available for sale that do not have a quoted market price and whose fair
values cannot be reliably measured are carried at cost, less provision for impairment.
Loans and Receivables
Loans and receivables are the financial assets raised by the Bank providing money, commodity and services to debtors. Loans
are financial assets with fixed or determinable payments and not quoted in an active market.
Loans and receivables are recorded at cost and measured at amortized cost by using effective interest method. The duties
paid, transaction expenditures and other similar expenses on assets received against such risks are considered as a part of
transaction cost and charged to customers.
Financial Assets Held to Maturity
Held-to-maturity securities are financial assets that are not classified as loans and receivables with fixed maturities and pre-
determinable payments that the Bank has the intent and ability to hold until maturity. The financial assets held to maturity
are initially recognized at cost and subsequently carried at amortized cost using effective interest method with internal rate
of return after deducting impairments, if any. Interest earned on financial assets held-to-maturity is recognized as interest
income in the statement of income.
There are no financial assets that were previously classified as held to maturity but cannot be subject to this classification for
two years due to the violation of the tainting rule.
Associates and Subsidiaries
Subsidiaries are the entities that the Bank has the power to govern the financial and operating policies of those so as to obtain
benefits from its activities. Subsidiaries are accounted in accordance with TAS 39 – Financial Instruments: Recognition and
Measurementin the unconsolidated financial statements. Subsidiaries are recorded at fair value. Subsidiaries which are not
traded in an active market and whose fair value cannot be reliably set are reflected in financial statements with their costs after
deducting impairment losses, if any.