Financial Position A&T Finansal Kiralama A.Ş. Annual Report 2024 78 79 (Amounts expressed Turkish lira (“TL”) unless otherwise indicated.) (Amounts expressed Turkish lira (“TL”) unless otherwise indicated.) A&T FİNANSAL KİRALAMA A.Ş. A&T FİNANSAL KİRALAMA A.Ş. NOTES TO THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2024 NOTES TO THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2024 A&T FİNANSAL KİRAL MA A. Ş. NOTES TO THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2024 (Amounts expressed Turkish lira (“TL”) unless otherwise indicated.) 19 2 - BASIS OF PREPARATION OF FINANCIAL STATEMENTS (Continued) 2.3 Summary of significant accounting policies (Continued) Write-off The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Company expects no significant recovery from the amount written off. Tangible assets Tangible assets that except for buildings are shown over the amount after accumulated depreciation and accumulated impairments are deducted from their cost values. Buildings are reflected to the financial statements with their fair values according to the revaluation method. Independent valuation experts are used in the fair value calculation of land and buildings. Tangible assets are depreciated principally on a straightline basis considering the expected useful lives. The estimated useful lives, residual values, and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis. Expenses for the maintenance of tangible assets are normally recorded in profit and loss statement. Gain or loss arising on the disposal or retirement of an item of tangible asset is determined as the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss. Buildings 50 years Fixtures 5 years Leasehold improvements the shortest of the lease period or useful life Gains and losses on disposal of property and equipment are determined by reference to their carrying amount and are taken into account in determining operating profit (Note 5). Intangible assets Intangible assets consist of computer software and are defined with inflation adjusted costs until 31 December 2004. Intangible assets mainly comprise of expenditures to acquire software licenses and amortized by using the straight-line method over their useful lives of 5 years (Note 6). Impairment of assets Assets that are subject to depreciation and amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets suffered impairment is reviewed for possible reversal of the impairment at each reporting date. Capital increase Capital increases by the existing shareholders are decided in the General Assembly Meetings and accounted for over the registered nominal values. A&T FİNANSAL KİRAL MA A. Ş. NOTES TO THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2024 (Amounts expressed Turkish lira (“TL”) unless otherwise indicated.) 20 2 - BASIS OF PREPARATION OF FINANCIAL STATEMENTS (Continued) 2.3 Summary of significant accounting policies (Continued) Provisions for severance pay Severance pay is paid in case of retirement or dismissal in accordance with the provisions of the current laws and collective bargaining agreements in Turkiye. In accordance with the updated TAS 19 Employee Benefits Standard (“TAS 19”), such payments are considered as defined retirement benefit plans. Liability of severance pay recognized in the balance sheet has been calculated according to the net present value of the expected future liability amounts due to retirement of all employees and reflected in the financial statements. All calculated actuarial losses and gains are accounted for as other comprehensive income. Provisions, contingent liabilities and contingent assets Provisions are recognized when the Company has a present obligation as a result of a past event, and it is probable that the Company will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. Employee benefits The company, severance pay and the obligation to allow rights "Turkiye on the Benefits Employee Accounting Standards" (“TAS 19") is recognized under the provisions of the balance sheet and the "Employee Benefits Provision" is classified under account. The Company is required to make a payment to the employee who is paid off due to retirement or resignation and except the reasons of the behaviors that are specified in Labor Law, in accordance with the existing labor law in Turkiye. The provision for employment termination benefits, the probable liability incurred under this act, is calculated on the basis of today's value using certain actuarial estimates and reflected to the financial statements (Note 11). Interest income and expenses Interest Income and Expenses are accounted basis using effective rate of interest method. Borrowing costs All of borrowing costs when incurred are recorded on income statement.
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