Page 83 - A&T BANK ANNUAL REPORT 2012

81 80 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
XIII. Information on leasing activities
Finance leasing activities as the lessor
Tangible assets acquired by way of finance leasing are recognized in tangible assets and the obligations under finance leases
arising from the lease contracts are presented under “Finance Lease Payables” account in the financial statements. In the
determination of the related assets and liabilities, the lower of the fair value of the leased asset and the present value of
leasing payments is considered. Financial costs of leasing agreements are expanded in lease periods at a fixed interest rate.
If there is impairment in the value of the assets obtained through financial lease and in the expected future benefits, the leased
assets are valued with net realizable value. Depreciation for assets obtained through financial lease is calculated in the same
manner as tangible assets.
Interest and exchange rate expenses related to financial leasing are recognized in the income statement. The Bank does not
provide financial leasing services as a lessor.
Transactions regarding operational leases are accounted on an accrual basis in accordance with the term of the related
contracts.
Operational leases
Transactions regarding operational lease agreements are accounted on an accrual basis in accordance with the terms of the
related contracts.
XIV. Information on provisions and contingent liabilities and contingent assets
Provisions and contingent liabilities are provided for in accordance with the TAS 37-Provisions, Contingent Liabilities and
Contingent Assets, except for the general and specific provisions set aside for the loans and other receivables.
Provisions are recognized when the Bank has a present legal or constructive obligation as a result of past events, it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of
the amount of obligation can be made.
A provision for contingent liabilities arising from past events should be recognized in the same period of occurrence if it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable
estimate the amount of the obligation can be made.
XV. Information on liabilities regarding employee benefits
Reserve for employee termination benefits
In accordance with existing Turkish Labour Law, the Bank is required to make lump-sum termination indemnities to each
employee who has completed one year of service with the Bank and whose employment is terminated due to retirement or
for reasons other than resignation or misconduct. The computation of the liability is based upon the retirement pay ceiling
announced by the Government. The applicable ceiling amount as at 31 December 2012 is TL 3,034 (full TL) (31 December 2011:
TL 2,732 (full TL)).