184 / 276
182 A&T BANK ANNUAL REPORT 2015
ARAP TÜRK BANKASI ANONİM ŞİRKETİ
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT 31 DECEMBER 2015
(AMOUNTS EXPRESSED IN THOUSANDS OF TURKISH LIRA (“TL”) UNLESS OTHERWISE STATED. )
CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED UNCONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE NOTE I OF SECTION THREE
Gains and losses arising from a change in fair value of trading derivatives after the re measurement are accounted in the
income statement. The fair value of the derivative financial instruments is calculated using quoted market prices by using
discounted cash flows model.
V. INFORMATION ON INTEREST INCOME AND EXPENSE
Interest income and expense are recognized according to the effective interest method based on accrual basis. Effective
interest rate is the rate that discounts the expected cash flows of financial assets or liabilities during their lifetimes to
their carrying values. Effective interest rate is calculated when a financial asset or a liability is initially recorded and is not
modified thereafter.
The computation of effective interest rate comprises discounts and premiums, fees and commissions paid or received
and transaction costs. Transaction costs are additional costs that are directly related to the acquisition, issuance or
disposal of financial assets or liabilities.
In accordance with the related regulation, the accrued interest income on non-performing loans are reversed and
subsequently recognized as interest income only when collected.
VI. INFORMATION ON FEES AND COMMISSION
Fees and commission received and paid are recognized according to either accrual basis of accounting or effective
interest method depending on nature of fees and commission; incomes derived from agreements and asset purchases
for third parties are recognized as income when realized.
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.