ATB_FRAE_2015

80 A&T BANK ANNUAL REPORT 2015

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. )

CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED UNCONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE NOTE I OF SECTION THREE

Intangible assets are initially recorded at their costs in compliance with the “TAS 38 - Intangible Assets”.

The costs of the intangible assets purchased before 31 December 2004 are restated from the purchasing dates to 31

December 2004, the date the hyperinflationary period is considered to be ended. The intangible assets purchased after

this date are recorded at their historical costs. The intangible assets are amortized based on straight line amortization.

The useful life of software is determined as 3-15 years.

If there is objective evidence of impairment, the asset’s recoverable amount is estimated in accordance with the “TAS 36

- Impairment of Assets” and if the recoverable amount is less than the carrying value of the related asset, a provision for

impairment loss is made.

XIII. INFORMATION ON TANGIBLE ASSETS

The costs of the tangible assets purchased before 31 December 2004 are restated from the purchasing dates to 31

December 2004, the date the hyperinflationary period is considered to be ended. In subsequent periods no inflation

adjustment is made for tangible assets, and costs which are restated as of 31 December 2004 are considered as their

historical costs. Tangible assets purchased after 1 January 2005 are recorded at their historical costs after foreign

exchange differences and financial expenses are deducted if any.

Gains and losses arising from the disposal of the tangible assets are calculated as the difference between the net book

value and the net sales price and recognized in the income statement of the period.

Maintenance and repair costs incurred for tangible assets are recorded as expense. Expenditures incurred that extend

the useful life and service capacity of the assets are capitalized.

The depreciation rates used approximate the rates of the useful life of the tangible assets are as follows:

Tangible Assets

Estimated Useful Life (Years)

Depreciation Rate (%)

Buildings

Motor vehicles

Office equipment, furniture and fixture

3-50

2-33

There are no changes in the accounting estimates that are expected to have an impact in the current or subsequent

periods.

At each reporting date, the Bank evaluates whether there is objective evidence of impairment on its assets. If there is

an objective evidence of impairment, the asset’s recoverable amount is estimated in accordance with the “TAS 36 -

Impairment of Assets” and if the recoverable amount is less than the carrying value of the related asset, a provision for

impairment loss is made.

XIV. 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.