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Türkiye Vakıflar Bankası Türk Anonim Ortaklığı
Unconsolidated Financial Report as at and
For the Year Ended 31 December 2013
(Currency: Thousands of TurkIsh Lıra (“TL”))
(Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Section 3 Note I)
There are no financial assets that are not allowed to be classified as held-to-maturity investments for two years due to the tainting rules applied for the
breach of classification rules.
Held-to-maturity investments are measured at amortized cost using effective interest method after deducting impairments, if any. Interest earned on
held-to-maturity investments is recognized as interest income.
Available-for-sale financial assets are the financial
assets other than loans and receivables, held-to-maturity investments and assets held for trading
purposes.
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 realized gain or losses are recognized directly in the statement of income.
Purchase and sales of investment securities are recognized at the date of delivery. The changes in fair value of assets during the period between trade
date and settlement date are accounted for in financial assets at fair value through profit or loss, available-for-sale financial assets and financial assets
held for trading in the settlement date-accounting policy.
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.
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 39 –
Financial Instruments: Recognition and Measurement
in the unconsolidated financial
statements. Subsidiaries, which are traded in an active market or whose fair value can be reliably measured, 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.
Associates are accounted in accordance with TAS 39-Financial Instruments: Recognition and Measurement in the unconsolidated financial statements.
Associates, which are traded in an active market or whose fair value can be reliably measured, are recorded at their fair values. Associates which
are not traded in an active market and whose fair values cannot be reliably set are reflected in financial statements with their costs after deducting
impairment losses, if any.
VII. 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 Bank 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 Bank 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.
VIII. Information on offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if, and only if, there is a currently enforceable
legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the asset and settle the liability
simultaneously.
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