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FINANCIAL INFORMATION
CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED UNCONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE NOTE I OF SECTION THREE
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. )
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.
d. 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.
VIII. 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 Group 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 Group 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.
If there is objective evidence that certain leasing receivables will not be collected; the Group assess that receivables in
accordance with the “Regulation on Identification of and Provision against Non-Performing Receivables of Financial
Leasing, Factoring and Financing Companies” published on the Official Gazette No.26588 dated 20 July 2007.
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.