12 Months Financial Report - Turkish Airlines

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TÜRK HAVA YOLLARI ANONİM ORTAKLIĞINOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER, 20092. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Cont’d)2.5 Summary of Significant Accounting Policies (Cont’d)2.5.9 Foreign Currency Transactions (Cont’d)The closing and average TL - US Dollar exchange rates for the periods are as follows:Closing Rate Average RateYear ended 31 December 2009 1,5057 1,5457Year ended 31 December 2008 1,5123 1,2976Year ended 31 December 2007 1,1647 1,3003The closing and average TL - Euro exchange rates for the periods are as follows:Closing Rate Average RateYear ended 31 December 2009 2,1603 2,1508Year ended 31 December 2008 2,1408 1,8969Year ended 31 December 2007 1,7102 1,77732.5.10 Earnings per ShareEarnings per share is calculated by dividing net profit by weighted average number of shares outstandingin the relevant period. In Turkey, companies are allowed to increase their capital by distributing freeshares to share holders from accumulated profits. In calculation of earnings per share, such free shares areconsidered as issued shares. Therefore, weighted average number of shares in the calculation of earningsper share is found by applying distribution of free shares retrospectively.2.5.11 Events Subsequent to the Balance Sheet DateAn explanation for any event between the balance sheet date and the publication date of the balance sheet,which has positive or negative effects on the Group (should any evidence come about events that wereprior to the balance sheet date or should new events come about) they will be explained in the relevantfootnoteIf such an event were to arise, the Group restates its financial statements accordingly.2.5.12 Provisions, Contingent Liabilities, Contingent AssetsProvisions are recognized when the Group has a present obligation as a result of a past event, and it isprobable that the Group will be required to settle that obligation, and a reliable estimate can be made ofthe amount of the obligation.The amount recognized as a provision is the best estimate of the consideration required to settle thepresent obligation at the balance sheet date, taking into account the risks and uncertainties surroundingthe obligation.Where a provision is measured using the cash flows estimated to settle the present obligation, its carryingamount is the present value of those cash flows.21
TÜRK HAVA YOLLARI ANONİM ORTAKLIĞINOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER, 20092. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Cont’d)2.5 Summary of Significant Accounting Policies (Cont’d)2.5.12 Provisions, Contingent Liabilities, Contingent Assets (Cont’d)When some or all of the economic benefits required to settle a provision are expected to be recoveredfrom a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement willbe received and the amount of the receivable can be measured reliably.Onerous ContractsPresent liabilities arising from onerous contracts are calculated and accounted for as provision.It is assumed that an onerous contract exists if Group has a contract which unavoidable costs to beincurred to settle obligations of the contract exceed the expected economic benefits of the contract.2.5.13 Segmental InformationThere are two operating segments of the Group, air transportation and aircraft technical maintenanceoperations; these include information for determination of performance evaluation and allocation ofresources by the management. The Company management uses the operating profit calculated accordingto financial reporting standards issued by the Capital Markets Board while evaluating the performances ofthe segments.2.5.14 Investment PropertyInvestment properties, which are properties, held to earn rentals and/or for capital appreciation aremeasured initially at cost, including transaction costs. Subsequent to initial recognition, investmentproperties are stated at fair value, which reflects market conditions at the balance sheet date.Gains or losses arising from changes in the fair values of investment properties are included in the profitor loss in the year in which they arise.Investment properties are derecognized when either they have been disposed of or when the investmentproperty is permanently withdrawn from use and no future economic benefit is expected from its disposal.Any gains or losses on the retirement or disposal of an investment property are recognized in profit orloss in the year of retirement or disposal2.5.15 Taxation and Deferred TaxTurkish tax legislation does not permit a parent company and its subsidiary to file a consolidated taxreturn. Therefore, provisions for taxes, as reflected in the accompanying consolidated financialstatements, have been calculated on a separate-entity basis.Income tax expense represents the sum of the tax currently payable and deferred tax.22
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12 Months Financial Report - Turkish Airlines

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