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Türkiye Vakıflar Bankası Türk Anonim Ortaklığı
and Its Financial Subsidiaries Consolidated Financial Report as at and
For the Year Ended 31 December 2013
(Currency: Thousands of Turkish Lira (“TL”))
Convenience Translation of the Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Section 3 Note I
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
Fees and commission received and paid are recognized according to either accrual basis of accounting or effective interest method depending on nature
of fees and commission, incomes derived from agreements and asset purchases for third parties are recognized as income when realized.
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 favorable 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. Purchase and sale transactions of securities are accounted at settlement dates.
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
Such assets are measured at their fair values and gain/loss arising is recorded in the consolidated statement of income. Interest income earned on
trading securities and the difference between their acquisition costs and fair values are recorded as interest income in the consolidated statement of
income. The gains/losses in case of disposal of such securities before their maturities are recorded under trading income/losses in the consolidated
statement of income.
Held to maturity investments, available-for-sale financial assets and loans and receivables
Held to maturity investments
are the financial assets with fixed maturities and pre-determined payment schedules that the Bank has the intent and
ability to hold until maturity, excluding loans and receivables.
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.
Available-for-sale financial assets
are the financial assets other than assets held for trading purposes, held-to-maturity investments and loans and
receivables.
Available-for-sale financial assets are initially recorded at cost and subsequently measured at their fair values. 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 calculated
as the difference between the fair values and the discounted values of available for sale financial assets are recorded in “valuation differences of the
marketable securities” under the equity. In case of sales, the realized gain or losses are recognized directly in the consolidated 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.
Loan 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.
VAKIFBANK ANNUAL REPORT 2013
217