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FINANCIAL HIGHLIGHTS AND 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
UNCONSOLIDATED FINANCIAL REPORT FOR THE
YEAR ENDED AT 31 DECEMBER 2014
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)
V. 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.
VI. 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
Financial assets, which are classified as “financial assets at fair value through profit or loss”, 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.
Such 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.
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. Held-to-maturity investments are measured at amortized cost using effective interest method after
deducting impairments, if any.
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.