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ARAP TÜRK BANKASI A.Ş.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS AT 31 DECEMBER 2013
( Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated. )
CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED CONSOLIDATED FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH, SEE NOTE I OF SECTION THREE
VII. INFORMATION ON FINANCIAL ASSETS
The Group categorizes and records its financial assets as financial assets at fair value through profit or loss, financial assets available-
for-sale, loans and receivables or financial assets held to maturity.
Financial assets except for measured at fair value through profit or loss are recognized initially with their transaction costs that are
directly attributable to the acquisition or issue of the financial asset. Purchase and sale transactions of securities are accounted at
settlement dates.
a. Financial Assets at Fair Value through Profit or Loss
This category has two sub categories: financial assets for trading purposes and those recorded as financial assets designated at fair
value through profit or loss at their initial recognition.
Financial assets held for trading are part of a portfolio aiming to generate a profit from short term fluctuations in prices or dealer’s
margin or in which a pattern of short term profit making exists.
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 IV 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.
b. 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.
c. 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.