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Financial Information and Risk
Management
İş Bankası
Annual Report 2013
TÜRKİYE İŞ BANKASI A.Ş.
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2013
Impairment losses attributable to the held to maturity investments are measured as the difference between the present values of
estimated future cash flows discounted using the original interest rate of financial asset and the book value of asset. The related
difference is recognized as a loss and it decreases the book value of the financial asset. At subsequent periods, if the impairment
loss amount decreases, impairment loss recognized is reversed.
When a decline occurs in the fair values of the “financial assets available for sale” of which value decreases and increases are
recognized in equity, the accumulated profit/loss that had been recognized directly in equity is transferred from equity to period
profit or loss. If, in a subsequent period, the fair value of the related asset increases, the impairment loss is reversed, with the
amount of the reversal recognized in profit or loss.
Loans are classified and followed in line with the provisions of the “Determining the Nature of Loans and Receivables and Principles
and Procedures on the Allocation of Loan and Receivable Provisions”, published on the Official Gazette numbered 26333 dated
1 November 2006. Within the scope of the relevant legislation the Parent Bank was allocating specific provision for the non-
performing loans and other receivables, the Parent Bank calculated to allocate specific provisions in accordance with the minimum
provision rates mentioned. Between the activities of the Group for the financial leasing and factoring operations for the receivables
in the “Financial Leasing, Factoring and Financing Companies Communiqué on Principles and Procedures for the Provision for
Receivables” under the special provision is made and published on the Official Gazette numbered 26558 dated 20 July 2007 and
for receivables acquired through the asset management activities in “Regulation on the Establishment and Operations of Asset
Management Companies” published on the Official Gazette numbered 26333 dated 01 November 2006 under the special provision
are made. Specific provisions are reflected in the income statement. Provisions released in the same year, “Provision Expense”
account are credited in the past years, the remaining part of the provisions in the “Other Operating Income” account transferred to
and recognized.
Other than specific allowances, the Parent Bank and the financial institutions affiliated to the Group also provide “general
allowances” for loan and other receivables classified in accordance with the Regulation on Identification of and Provision against
Non-Performing Loans and Other Receivables.
IX. Offsetting Financial Instruments
A financial asset and a financial liability shall be offset and the net amount shall be presented in the balance sheet only when a party
currently has a legally enforceable right to set off the recognized amounts or intends either to settle on a net basis or to realize the
asset and settle the liability simultaneously.
X. Sale and Repurchase Agreements and Securities Lending Transactions
Marketable securities subject to repurchase agreements are classified under “Available for Sale Financial Assets” or “Held to Maturity
Investments” in the Parent Bank’s portfolio and they are valued according to the valuation principles of the related portfolios.
Funds obtained from the repurchase agreements are recognized under “Funds from Repurchase Transactions” account in liabilities.
For the difference between the sale and repurchase prices determined by the repo agreements for the period; expense accrual is
calculated using the internal rate of return method.
Reverse repo transactions are recognized under the “Receivables from Reverse Repurchase Transactions” account. For the
difference between the purchase and resale prices determined by the reverse Repurchase agreements for the period; income
accrual is calculated using the internal rate of return method.
XI. Non-current Assets Held for Sale and Discontinued Operations and Related Liabilities
Assets that meet the criteria to be classified as held for sale are measured at the lower of its carrying amount and fair value less
costs to sell and presented in the financial statements separately. In order to classify a tangible fixed asset as held for sale, the asset
(or the disposal group) should be available for an immediate sale in its present condition subject to the terms of any regular sales
of such assets (or such disposal groups) and the sale should be highly probable. For a highly probable sale, the appropriate level of
management must be committed to a plan to sell the asset (or the disposal group), and an active programme to complete the plan
should be initiated to locate a customer. Also, the asset (or the disposal group) should have an active market sale value, which is
a reasonable value in relation to its current fair value. Events or circumstances may extend the completion of the sale more than
one year. Such assets are still classified as held for sale if there is sufficient evidence that the delay in the sale process is due to the
events and circumstances occurred beyond the control of the entity or the entity remains committed to its plan to sell the asset (or
disposal group).
