12 Months Financial Report - Turkish Airlines

TÜRK HAVA YOLLARI ANONİM ORTAKLIĞINOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER, 20092 BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Cont’d)2.1 Basis of Presentation (Cont’d)Basis of Preparation for Financial Statements and Significant Accounting Policies (Cont’d)Nevertheless, until the discrepancies between the IAS/IFRS accepted by the European Union, and theIAS/IFRS declared by IASB are announced by the Turkish Accounting Standards Board (“TASB”),IAS/IFRS will be in use. Under these circumstances, Turkish Accounting Standards/Turkish FinancialReporting Standards (“TAS/TFRS”), which are the standards published by TASB, not contradicting withIAS/IFRS will be predicated on.The accompanying consolidated financial statements have been prepared in accordance with IFRS andcomply with CMB’s decree announce on 17 April 2009 and 9 January 2009 regarding the format of thefinancial statements and footnotes since at the date of the issuance of these financial statements thedifferences of IAS/ IFRS accepted by the European Union are not declared by the TASB. Accordingly,some reclassifications are made in the prior year financial statements.All financial statements have been prepared on cost basis principal. Historical cost is generally based onthe fair value of the consideration given in exchange for assets.Currency Used In Financial StatementsThe individual financial statements of each Group entity are presented in the currency of the primaryeconomic environment in which the entity operates (its functional currency). For the purpose of theconsolidated financial statements, the results and financial position of each entity are expressed in TurkishLira (“TRY”), which is the functional currency of the Company, and the reporting currency for theconsolidated financial statements.Adjustment of Financial Statements in Hyperinflationary PeriodsAs per the 17 March 2005 dated, 11/367 numbered decree of CMB, companies engaged in Turkey andthose of which prepare their financial statements in accordance with the CMB Accounting Standards(including IAS/IFRS exercisers), use of inflationary accounting standards have been discontinuedeffective 1 January 2005. Pursuant effectuation, “Financial Reporting Standards in HyperinflationaryEconomies” issued by the International Accounting Standards Committee (IASC), (“IAS 29”) was nolonger applied henceforward.Comparative Information and Restatement of Prior Period Financial StatementsConsolidated financial statements of the Group have been prepared comparatively with the prior period inorder to give information about financial position and performance. On order to maintain consistency,with current year consolidated financial statements, comparative information is reclassified andsignificant changes are disclosed if necessary.Basis of the Consolidationa) The consolidated financial statements include the accounts of the parent company, Türk Hava YollarıA.O., its Subsidiary and its Affiliates on the basis set out in sections (b) and (c) below. Financialstatements of subsidiary and affiliates are adjusted where applicable in order to apply the same accountingpolicies. All transactions, balances, profit and loss within the Group are eliminated during consolidation7