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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 discontinued operation is a component of a bank that either has been disposed of, or is classified as held for sale. Gains or losses
relating to discontinued operations are presented separately in the income statement. There are no discontinued operation on
Parent Bank and consolidated associates.
XII. Goodwill and Other Intangible Assets
The Group’s intangible assets consist of consolidation goodwill and software programs.
Goodwill arising from the acquisition of a subsidiary represents the excess of cost of acquisition over the fair value of Group’s share
of the identifiable assets, liabilities, or contingent liabilities of the acquired subsidiary at the date of acquisition of the control.
Goodwill is recognized as an asset at cost and then carried at cost less accumulated impairment losses. In impairment-loss test,
goodwill is allocated between the Group’s every cash-generating unit that is expected to benefit from the synergies of the business
combination. To control whether there is an impairment loss in the cash-generating units that goodwill is allocated, impairment-
loss test is applied every year or more often if there is indications of impairment loss. In the cases, recoverable amount of cash-
generating unit is smaller than its book value; impairment loss is firstly used in reduction of book value of the cash-generating
unit, and then the other assets proportionally. Goodwill which is allocated for the impairment losses could not be reversed. When a
subsidiary is to be sold, related goodwill amount is combined with the profit/loss relating to this disposal. Positive goodwill arising
from the Group’s investments in its subsidiaries is recognized in Intangible Assets. Explanations on consolidation goodwill are given
in Note III.1.a. in Section Three.
As for other intangible assets, the purchased items are presented with their acquisition costs less the accumulated amortization
and impairment provisions. In case there is an indication of impairment, the recoverable amount of the related intangible asset is
estimated within the framework of TAS 36 “Impairment of Assets” and impairment provision is set aside in case the recoverable
amount is below its acquisition cost.
Such assets are amortized by the straight-line method in a period between 1-15 years considering their useful life. The amortization
method and period are periodically reviewed at the end of each year.
XIII. Tangible Assets
Tangible assets purchased before 1 January 2005, are presented in the financial statements at their inflation adjusted acquisition
costs as at 31 December 2004, and the items purchased in the subsequent periods are presented at acquisition costs less
accumulated amortization and impairment provisions. In case there is an indication of impairment, the recoverable amount of the
related intangible asset is estimated within the framework of TAS 36 “Impairment of Assets” and impairment provision is set aside in
case the recoverable amount is below its acquisition cost.
Assets under construction for leasing or for administrative purposes or for other objectives, which are not presently determined, are
amortized when they are ready for use.
The acquisition costs of tangible assets other than the land and construction in progress are amortized by the straight-line method,
according to their estimated useful lives. The estimated useful life, residual amount and the method of amortization are reviewed
every year for the possible effects of the changes that occur in the estimates and if there is any change in the estimates, they are
recognized prospectively.
Assets held under finance leases are depreciated over the expected useful life or lease termwhichever is the shorter for the
specified period.
Leasehold improvements are amortized in equal amounts considering their useful life. However, in any case the useful life cannot
exceed the leasing term. When the lease period is not certain or longer than 5 years, the amortization period is recognized as 5
years.
The difference between the sales proceeds arising from the disposal of tangible assets or the inactivation of a tangible asset and
the book value of the tangible asset are recognized in the income statement.
Regular maintenance and repair costs incurred for tangible assets are recorded as expense.
There are no restrictions such as pledges, mortgages on tangible assets.
