VAKIFBANK
2015 ANNUAL REPORT
236
CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE IN NOTE I. OF SECTION THREE
TÜRKİYE VAKIFLAR BANKASI TÜRK ANONİM ORTAKLIĞI AND
ITS FINANCIAL SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT AND
FOR THE YEAR ENDED 31 DECEMBER 2015
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)
Finance leasing activities
The total of minimum rent amounts are recorded at finance lease receivables account in gross amounts comprising the principal amounts and interests.
The interest, the difference between the total of rent amounts and the cost of the fixed assets, is recorded at unearned income account. As the rents
are collected, finance lease receivables account is decreased by the rent amount; and the interest component is recorded in the consolidated statement
of income as interest income.
Factoring operations
Factoring receivables are initially recorded at their historical costs less transaction costs. They are amortized using the effective interest method, taking
their historical costs and future cash flows into account and the amortized amounts are recognized as “other interest income” in the consolidated
statement of income.
VI. INFORMATION ON FEES AND COMMISSIONS
Banking services income is recorded as income when it is collected. Other fee and commission income is transferred to profit/loss accounts according
to time period principle on the basis of accrual using the principle of the effective interest method. Fee and commission expenses are recorded as
expense at the time they are paid.
VII. INFORMATION ON FINANCIAL ASSETS
A financial asset is any asset that is cash, an equity instrument of another entity, a contractual right to receive cash or another financial asset from
another entity; or to exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable to the entity.
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 while purchase and sale transactions of securities are accounted at settlement dates.
According to TAS 39 – Financial Instruments: Recognition and Measurement, financial assets are classified in four categories; as financial assets at fair
value through profit or loss, available-for-sale financial assets, held-to-maturity investments, and loans and receivables.
Financial assets at fair value through profit or loss
The financial assets included in this group are divided into two separate titles as "Financial assets held for trading” and “Financial assets classified as
financial assets at fair value through profit or loss".
Financial assets held for trading
are trading financial assets and are either acquired for generating profit from short-term fluctuations in the price or
dealer’s margin, or are the financial assets included in a portfolio in which a pattern of short-term profit making exists independent from the acquisition
purpose.
Financial assets classified as financial assets at fair value through profit or loss are financial assets which are not acquired for trading, however during
initial recognition classified as financial assets at fair value through profit or loss including transaction costs. Such an asset is not present in the Group’s
portfolio.
Both assets are measured at their fair values and gain/loss arising is recorded in the statement of income. Interest income earned on financial assets
and the difference between their acquisition costs and fair values are recorded as interest income in the statement of income. The gains/losses in case
of disposal of such securities before their maturities are recorded under trading income/losses in the statement of income.
Available-for-sale financial assets
Available-for-sale financial assets
are the financial assets other than loans and receivables, held-to-maturity investments and financial assets at
fair value through profit or loss. Available-for-sale financial assets are initially recorded at cost and subsequently measured at their fair values.
However, assets that are not traded in an active market are measured by valuation techniques, including recent market transactions in similar
financial instruments, adjusted for factors unique to the instrument being valued; or discounted cash flow techniques for the assets which do not
have a fixed maturity. Unrecognized gains or losses derived from the difference between their fair values and the discounted values are recorded in
“Valuation differences of the marketable securities” under the shareholders’ equity. In case of disposal of such assets, the valuation differences under
shareholder’s equity are transferred directly to the statement of income.
