Page 81 - A&T BANK ANNUAL REPORT 2012

79 78 A&T BANK 2012 ANNUAL REPORT •
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
VII. Information on impairment of Financial Assets
Financial assets or group of financial assets are reviewed at each balance sheet date to determine whether there is objective
evidence of impairment. If any such indication exists, the Bank estimates the amount of impairment.
Impairment loss incurs if, and only if, there is objective evidence that the expected future cash flows of financial asset or
group of financial assets are adversely affected by an event(s) (“loss event(s)”) incurred subsequent to recognition. The losses
expected to incur due to future events are not recognized even if the probability of loss is high.
If there is an objective evidence that certain loans will not be collected, for such loans; the Bank provides specific and general
allowances for loan and other receivables classified in accordance with the Regulation on Identification of and Provision against
Non-Performing Loans and Other Receivables published on the Official Gazette no. 26333 dated 1 November 2006 and the
amendments to this regulation. The allowances are recorded in the statement of income of the related period.
Provision in prior periods has been collected which is provisioned accounts are recorded under other operating income is
deducted. Is collected which is provisioned in the same year, the impairment loss is deducted from loans and other receivables.
VIII. Information on offsetting financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if, and only if, there is a
currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize
the asset and settle the liability simultaneously.
IX. Information on sale and repurchase agreements and lending of financial assets
Repurchase (“repo”) and resale (“reverse repo”) agreements of financial assets are followed at the balance sheet accounts.
Financial assets which are sold to customers under repurchase agreements are categorized according to initial classification
and are measured in accordance with the accounting policy of the related portfolio.
Funds obtained under repurchase agreements are accounted under funds provided under repurchase agreements in liability
accounts. The interest expense accruals are calculated by means of internal rate of return method over the difference resulting
from repurchase and sale prices for the relevant period.
Securities subject to repurchase (“reverse repo”) agreements are reflected under receivables from reverse repurchase
agreements. The difference between the purchase and resell price which is related with the period is computed with the
effective interest rate method for accrued interest income.
X. Information on assets held for sale and discontinued operations
An asset that is classified as held for sale (or to be discarded fixed assets) is measured with its book value or cost deducted
fair value, depending on the lower one. An asset to be classified asset held for sale, particular asset (or to be discarded fixed
assets) should be similar to these types of assets and should be able to be sold immediately with commonly accepted terms
and conditions.Asset should be marketed in line with its fair value. For selling probability to be high, relevant management
level should plan the sale and should finalize the plan by determining the buyers.
Assets held for sale are comprised of tangible assets acquired due to non performing receivables, and are accounted in the
financial statements in accordance with the “Regulation On The Disposals of The Commodities and Properties Acquired Due
to Receivables and The Purchase and Sale of Precious Metals by Banks” dated 1 November 2006 and published on the Official
Gazette No.26333.
A discontinued operation is classified as the Bank’s assets discarded or assets held for sales. Information on discontinued
operations is presented separately in consolidated income statement. As at reporting date, the Bank does not have any
discontinued operations.