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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)
XIII. Information on leasing activities
Finance leasing activities as the lessee
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.
Operational leases
Transactions regarding operational lease agreements are accounted on an accrual basis in accordance with the terms of the related contracts.
XIV. Information on provisions and contingent liabilities
In the financial statements, a provision is made for an existing commitment resulted from past events if it is probable that the commitment will be
settled and a reliable estimate can be made of the amount of the obligation. Provisions are calculated based on the best estimates of management on
the expenses to incur as at the balance sheet date and, if material, such expenses are discounted for their present values. If the amount is not reliably
estimated and there is no probability of cash outflow from the Bank to settle the liability, the related liability is considered as “contingent” and disclosed
in the notes to the financial statements.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence
of one or more uncertain future events not wholly within the control of the entity. Contingent assets are not recognized in financial statements since
this may result in the recognition of income that may never be realized. Contingent assets are assessed continually to ensure that developments are
appropriately reflected in the financial statements. If it has become virtually certain that an inflow of economic benefits will arise, the asset and the
related income are recognized in the financial statements of the period in which the change occurs. If an inflow of economic benefits has become
probable, the Bank discloses the contingent asset.
XV. Information on obligations of the Bank concerning employee rights
Reserve for employee termination benefits
In accordance with existing Turkish Labour Law, the Bank is required to make lump-sum termination indemnities to each employee who has completed
one year of service with the Bank and whose employment is terminated due to retirement or for reasons other than resignation or misconduct. The
computation of the liability is based upon the retirement pay ceiling announced by the Government. The applicable ceiling amount as at 31 December
2013 is TL 3,254 (full TL) (31 December 2012: TL 3,034 (full TL)).
The Bank calculated and reserved for employee severance indemnities using actuarial method in compliance with the TAS 19 –
Employee Benefits
.
As at 31 December 2013 and 2012, the major actuarial assumptions used in the calculation of the total liability are as follows:
Current Year
Prior Year
Discount Rate
9.70%
7.01%
Inflation Rate
6.40%
5.00%
Increase in Real Wage Rate
7.40%
5.00%
Other benefits to employees
The Bank has provided provision for undiscounted short-term employee benefits earned during the financial period as per services rendered in
compliance with TAS 19 in the accompanying unconsolidated financial statements.
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