Notes to the Consolidated Financial Statements for the Year Ended
31 December 2012
Regular maintenance and repair costs incurred for tangible assets are recorded as expense.
There are no restrictions such as pledges, mortgages on tangible assets.
The depreciation rates used in amortization of tangible assets and their estimated useful lives are as follows:
Estimated Economic Life (Year)
Depreciation Rate
Safe Boxes
Other Movables
Leased Assets
XIV. Investment Property
Investment property is kind of property which is held by the Group to earn rent. These are listed in the attached consolidated financial
statements at acquisition costs less accumulated amortization and impairment provisions. The accounting policies mentioned for tangible
assets are also valid for investment property.
XV. Leasing Transactions
Assets acquired under financial leases are carried at the lower of their fair values or amortized value of the lease payments. Leasing
payables are recognized as liabilities in the balance sheet while the interest payable portion of the payables is recognized as a deferred
amount of interest. Finance lease payments are separated as financial expense and principal amount payment, which provides a decrease
in finance lease liability, thus helps a fixed rate interest on the remaining principal amount of the debt to be calculated. Within the context
of the Group’s general borrowing policy, financial expenses are recognized in the income statement. Assets held under financial leases are
recognized under the property, plant and equipment (movable properties) account and are depreciated by using the straight line method.
There is one company which exclusively does finance leases (İş Finansal Kiralama A.Ş.) and one bank (Türkiye Sınai Kalkınma Bankası A.Ş.)
which operates finance lease activities as per provisional article No 4 of the Banking Law No 5411. Finance lease activities are operated
according to the “Law on Financial Leasing, Factoring and Financing” No 6361.
In cases when the Group is the “lessor”, finance lease receivables are recognized by their fair values on the first entry date and in the
reporting periods after the first entry date they are carried at amortized cost by using the effective interest rate method. Interest income on
finance lease is allocated to the accounting periods in order to reflect a fixed term interest from the investments that are subject to leasing.
Operational lease transactions are recognized in line with the related agreement on an accrual basis.
XVI. Insurance Technical Income and Expense
In insurance companies premium income is obtained subsequent to the share of reinsurers in policy income is diminished.
Claims are recorded in expense as they are reported. Outstanding loss provisions are recognized for the claims reported but not paid yet and
for the claims that incurred but not reported. Reinsurers’ share of claims paid and outstanding loss are offset in these provisions.
XVII. Insurance Technical Reserves
Effective 1 January 2005, the Group’s insurance subsidiaries adopted TFRS 4, Insurance Contracts (“TFRS 4”). TFRS 4 represents the
completion of phase I and is a transitional standard until the recognition and measurement of insurance contracts has more fully addressed.
TFRS 4 requires that all contracts issued by insurance companies be classified as either insurance contracts or investment contracts.
Contracts with significant insurance risk are considered insurance contracts. Insurance risk is defined as risk, other than financial risk,
transferred from the holder of a contract to the issuer. TFRS 4 permits a company to continue with its previously adopted accounting
policies with regard to recognition and measurement of insurance contracts. Only in case of presentation of more reliable figures a change in
accounting policy shall be carried out. Contracts issued by insurance companies without significant insurance risk are considered investment
contracts. Investment contracts are accounted for in accordance with TAS 39 “Turkish Accounting Standard for Financial Instruments:
Recognition and Measurement”.
Within the framework of the current insurance regulation, reserves accounted by insurance companies for unearned premium claims,
unexpired risk reserves, outstanding claims and life-mathematical reserves are presented in the consolidated financial statements.
The reserve for unearned premiums consists of the gross overlapping portion of accrued premiums for insurance contracts that are in effect
to the subsequent period or periods of balance sheet date on a daily basis without a commission or any other discount.
In case the expected loss premium ratio is over 95%, the unexpired risk reserves are recognized for the main branches specified by the
Undersecretariat of Treasury. For each main branch, the amount found by multiplying the ratio exceeding 95% by the net unearned
premium provision, is added to the unearned premium provision of that main branch.
Reserve for outstanding claim is recognized for the accrued claims which are not paid in the current period or in the prior periods or for the
claims realized with the expected costs but not reported.
1...,206,207,208,209,210,211,212,213,214,215 217,218,219,220,221,222,223,224,225,226,...300