FINANCIAL INFORMATION AND RISK MANAGEMENT
TÜRKİYE İŞ BANKASI A.Ş.
Notes to the Consolidated Financial Statements for the Year Ended
31 December 2012
ANNUAL REPORT 2012
1. Cash and Banks
Cash consists of cash in vault, foreign currency cash, money in transit, cheques purchased and precious metals. Foreign currency cash and
banks are shown in the balance sheet by their amounts converted into TL at the foreign exchange rate on the balance sheet date. The
carrying values of both the cash and banks are their estimated fair values.
2. Marketable Securities
a. Financial Assets at Fair Value through Profit And Loss
a.1. Financial Assets Held for Trading
Financial assets held for trading are those acquired for the purpose of generating profit from short termmarket fluctuations in prices or
similar elements, or securities which are part of a portfolio set up to realize short term profit regardless of the purpose of acquisition.
Financial Assets Held For Trading are presented in the balance sheet with their fair values and are subject to valuation at fair values after
the initial recognition. In cases where values that form the basis for the fair value do not exist in active market conditions, it is accepted that
the fair value is not reliably determined and “amortized cost”, calculated by the internal rate of return method, is taken into account as the
Any gains or losses resulting from such valuation are recorded in the profit and loss accounts. In frame of legal regulations, any positive
difference between the historical cost and amortized cost of financial assets are recognized under the “Interest Income” account, and in
case the fair value of the asset is over the amortized cost, the positive difference is recognized in the “Gains on Securities Trading” account.
If the fair value is less than the amortized cost, the negative difference is recognized under the “Losses on Securities Trading” account.
Any profit or loss resulting from the disposal of those assets before their maturity date is recognized within the framework of the same
a.2. Financial Assets at Fair Value through Profit and Loss
Financial assets at fair value through profit and loss represent the financial assets at fair value through profit and loss at the initial
recognition and those are not obtained for trading purposes. Recognition of fair value differences of those assets are similar to the financial
asset held for trading.
b. Financial Assets Available for Sale and Held to Maturity Investments
b.1. Financial Assets Available for Sale
Financial assets available for sale represent non-derivative financial assets other than bank loans and receivables, held to maturity
investments and financial assets at fair value through profit and loss. Initial recognition and subsequent valuation of financial assets
available for sale are performed based on the fair value including transaction costs. The amount arising from the difference between cost
and amortized value is recognized through income statement by using the internal rate of return. If a price does not occur in an active
market, fair value cannot be reliably determined and “Amortized Value” is determined as the fair value using the internal rate of return.
Unrealized gains and losses arising from changes in fair value of the financial assets available for sale are not recognized in the income
statement, they are recognized in the “Marketable Securities Revaluation Fund” until the disposal, sale, redemption or incurring loss of those
assets. Fair value differences accounted under equity arising from the application of fair value are reflected to the income statement when
these assets are sold or when the valuation difference is collected.
b.2. Held to Maturity Investments
Held to maturity investments are the investments, for which there is an intention of holding until maturity and the relevant conditions for
fulfillment of such intention, including the funding ability, and for which there are fixed or determinable payments with fixed maturity;
and which are recognized at fair value at initial recognition. Held to maturity investments with the initial recognition at fair value including
transaction costs are subject to valuation with their discounted cost value by using the internal rate of return method less provision for any
impairment, if any. Interest income from held to maturity investments are recognized in the income statement as an interest income.
There are no financial assets that are classified by the Group as held to maturity investments; however, they cannot be classified under this
classification for two years for not satisfying the requirements of the related classification.