Financial Position A&T Finansal Kiralama A.Ş. Annual Report 2024 68 69 (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.) 9 1 - ORGANIZATION AND OPERATIONS OF THE COMPANY A&T Finansal Kiralama Anonim Şirketi (“the Company”) was established on 4 July 1997, pursuant to the license obtained from the Under secretariat of Treasury and Foreign Trade for the purpose of financial leasing as permitted by the law number 3226. The Company’s leasing operations principally focused on construction, office equipment and other equipment with vehicles, equipment for real estate and agricultural activities equipment. Head Office address of the company is as follows: Örnek Mahallesi Finans Çıkmaz Sokağı No:4 Ataşehir – İstanbul The main shareholder of the Company is Arap Türk Bankası A.Ş. with 99.98% of the shares. The financial statements were approved for issue by the Board of Directors based on the Board of Directors decision dated 14 February 2025. The General Assembly has the authority to change the financial statements. A significant part of the Company’s Operates in one geographical region (Türkiye) and one commercial area (leasing) are carried out. The number of personnel working for the Company as at 31 December 2024 is 20 (31 December 2023: 22). 2 - BASIS OF PREPARATION OF FINANCIAL STATEMENTS 2.1 Basis of presentation 2.1.1 Statement of compliance and declaration of conformity TAS The Company prepares its financial statements in accordance with “the Banking Regulation and Supervision Agency (“BRSA”) Accounting and Reporting Regulations” including the communique on “Communiqué on Uniform Chart of Accounts and Prospectus to be implemented by Financial Leasing, Factoring and Financing Companies and on Financial Statements to be announced to Public” published in the Official Gazette dated 24 December 2013 and numbered 28861 and the “Regulation on Principles For Establishment And Operations Of Financial Leasing, Factoring and Financing Companies” and other regulations, communiqués and circulars published by the BRSA and Turkish Accounting Standards (“TAS”) published by the Public Oversight Accounting and Auditing Standards Authority (“POA”) for the matters not legislated by the aforementioned regulations (together “the BRSA Accounting and Financial Reporting Legislation”). Changes regarding classification and measurement of financials assets Within the scope of "Regulation on Making Amendments to the Regulation on Accounting Practices and Financial Statements of Leasing, Factoring and Financing Companies" published in the Official Gazette dated 2 May 2018 and numbered 30409, companies are entitled to apply for the expected credit loss model under TFRS 9 as long as informing BRSA and the effective date of the regulation is 30 September 2018. The Company has started to calculate its expected credit loss in accordance with TFRS 9 starting with the Board of Directors decision dated 9 October 2019. Additional paragraph for convenience translation: The differences between accounting principles, as described in these preceding paragraphs and accounting principles generally accepted in countries in which financial statements are to be distributed and International Financial Reporting Standards (“IFRS”) have not been quantified in these financial statements. Accordingly, these financial statements are not intended to present the financial position, results of operations and changes in financial position and cash flows in accordance with the accounting principles generally accepted in such countries and IFRS. 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.) 10 2 - BASIS OF PREPARATION OF FINANCIAL STATEMENTS (Continued) 2.1 Basis of presentation (Continued) 1.1.2 Preparation of financial statements in hyperinflationary periods Restatement adjustments have been made to compensate for the effect of changes in the general purchasing power of the Turkish Lira, in accordance with Turkish Accounting Standards on “Preparation of Financial Statements in Hyperinflationary Periods” (“TAS 29”) for the financial statements prepared until 31 December 2004. BRSA issued a circular on 28 April 2005 stating that the indicators requiring the application of inflation accounting ceased to exist; consequently inflation accounting was not applied in the financial statements after 1 January 2005. On November 23, 2023, POA announced that, entities reporting under the TFRS should begin implementing "TAS- 29 Financial Reporting in Hyperinflationary Economies" standard in their financial statements, from periods ending on and after December 31, 2023. Besides, regulatory and auditing bodies that are authorized in their respective areas have flexibility to determine alternative transition dates for the application of TAS - 29. Within the scope of the decision dated December 12, 2023 and numbered 10744 by the BRSA, banks, financial leasing, factoring, financing, savings financing, and asset management companies are not subject to inflation adjustments required under TAS-29 in their financial statements as of December 31, 2023. Based on the decision dated January 11, 2024 and numbered 10825, these entities are required to implement inflation accounting starting from January 1, 2025. Moreover, in accordance with the BRSA's decision dated December 5, 2024 and numbered 11021, it was decided that banks and financial leasing, factoring, financing, savings financing and asset management companies would not apply inflation accounting in 2025. 1.1.3 Offsetting Financial assets and liabilities are offset and the net amount is reported in the balance sheet when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously. 1.1.4 Going concern The Company prepared the financial statements according to going concern principles. 1.1.5 Functional currency Financial statements of the Company are presented in the currency (functional currency unit) valid in the basic economic environment in which it operates. The financial position and operating result of the company are expressed in Turkish Lira (“TL”), which is the Company's valid currency and the presentation currency for the financial statement. 1.1.6 Significant accounting evaluation estimates and assumptions The preparation of financial statements requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected. Information about significant areas of estimation uncertainty that have the most significant risk of resulting in a material adjustment within the next financial year is included in the following notes:
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