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İş Bankası
Annual Report 2013
Financial Information and Risk Management
TÜRKİYE İŞ BANKASI A.Ş.
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2013
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.
3. Loans and Receivables
Loans and receivables represent unquoted financial assets in an active market that provide money, goods or services to the debtor
with fixed or determinable payments.
Loans and receivables are initially recognized with their fair values including settlement costs and carried at their amortized costs
calculated using the internal rate of return at the subsequent recognition.
Retail and commercial loans that are followed under cash loans are accounted at original maturities, based on their contents.
Foreign currency indexed consumer and corporate loans are followed at TL accounts after converting into TL by using the opening
exchange rates. At the subsequent periods, increases and decreases in the loan capital are recognized under the foreign currency
income and expense accounts in the income statement depending on foreign currency rates being higher or lower than opening
date rates. Repayments are calculated using the exchange rates at the repayment dates and exchange differences are recognized
under the foreign currency income and expense accounts in the income statement.
VIII. Impairment of Financial Assets
At each balance sheet date, the Group companies evaluate the carrying amount of its financial assets or a group of its financial
assets to determine whether there is an objective indication that those assets have suffered an impairment loss. If such indication
exists, the Group determines the related impairment amount.
A financial asset or a group of financial assets is subject to impairment loss only if there is an objective indication that the occurrence
of one or more than one event (“loss event”) subsequent to the initial recognition of that asset has an effect on the reliable estimate
of the expected future cash flows of the related financial asset and asset group. Irrespective of their high probability of incurrence,
future expected losses are not recognized.
