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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 UNCONSOLIDATED FINANCIAL STATEMENTS
AT 31 DECEMBER 2015
(AMOUNTS EXPRESSED IN THOUSANDS OF TURKISH LIRA (“TL”) UNLESS OTHERWISE STATED. )
into Turkish Lira over the Bank’s exchange rates prevailing at the balance sheet date and the resulting exchange rate
differences are accounted as foreign exchange gains and losses.
III. EXPLANATIONS ON INVESTMENTS IN ASSOCIATES AND SUBSIDIARIES
Subsidiaries are the entities that the Bank has the power to govern the financial and operating policies of those so
as to obtain benefits from its activities. Subsidiaries are accounted in accordance with “TAS 27 - Individual Financial
Statements” in the unconsolidated financial statements. Subsidiaries are recorded at fair value. Subsidiaries which are
not traded in an active market and whose fair value cannot be reliably set are reflected in financial statements with their
costs after deducting impairment losses, if any.
IV. INFORMATION ON FORWARD TRANSACTIONS, OPTIONS AND DERIVATIVE INSTRUMENTS
The Bank’s financial derivatives are classified as “held for trading” in accordance with “TAS - 39 Financial Instruments:
Recognition and Measurement”.
Derivatives are initially recorded at their purchase costs including the transaction costs. The notional amounts of
derivative transactions are recorded in off-balance sheet accounts based on their contractual amounts.
The derivative transactions are measured at fair value subsequent to initial recognition and if the fair value of a derivative
financial instrument is positive, it is disclosed under the main account fair values of financial assets through profit or
loss” in trading derivative financial instruments and if the fair value difference is negative, it is disclosed under trading
derivative financial liabilities.
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 Bank 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.