VKF_FRAE_2018_uyg11

164 Part III: Financial Highlights and Assessment of Risk Management CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED UNCONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE NOTE I. OF SECTION THREE TÜRKİYE VAKIFLAR BANKASI TÜRK ANONİM ORTAKLIĞI AND ITS FINANCIAL SUBSIDIARIES NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED DECEMBER 31, 2018 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.) Related parties Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions. Shareholders, top executives and board members are accepted as related party personally, with their families and companies according to TAS 24 - Related Party Disclosures Standard. Transactions made with related parties are disclosed in Section 5 Note V. Classifications Reclassification procedures in scope of TFRS 9 are stated below. TFRS 9 Finacial Instruments implementation and effects TFRS 9 “Financial Instruments”, which is effective as of January 1, 2018 is published by the Public Oversight Accounting and Auditing Standards Authority (“POA”) in the Official Gazette numbered 29953 dated January 19, 2017. TFRS 9 will replace TAS 39 Financial Instruments: recognition and measurement, related to the classification and measurement of financial instruments. TFRS 9 sets out the new principles for the classification and measurement of financial instruments, impairment for credit risk on financial assets and general hedge accounting. Classification and measurement of financial instruments According to TFRS 9 requirements, classification and measurement of financial assets will depend on the business model within which financial assets are managed and their contractual cash flow characteristics whether the cash flows represent “Solely Payments of Principal and Interest” (SPPI). Before TFRS 9 In Scope of TFRS 9 Financial Assets Measurement Bases Book Value December 31, 2017 Measurement Bases Book Value January 1, 2018 Cash Balances and Central Bank Measured at amortized cost 28,644,824 Measured at amortized cost 28,644,824 Banks and Money Markets Measured at amortized cost 13,539,930 Measured at amortized cost 13,539,930 Marketable Securities Fair value through profit and loss 263 Fair value through profit and loss 43,633 Fair value through other comprehensive income (Available-for-sale) 13,549,714 Fair value through other comprehensive income 6,051,817 Measured at amortized cost (Held to Maturity Investments) 16,766,071 Measured at amortized cost 24,422,643 Derivative Financial Assets Held-for-trading Fair value through profit and loss 1,936,525 Fair value through profit and loss 1,936,525 Loans (Gross) Measured at amortized cost 182,932,228 Measured at amortized cost 182,932,228