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)2.5 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properties are derecognized when either they have been disposed of or when the investmentproperty is permanently withdrawn from use and no future economic benefit is expected from its disposal.Any gains or losses on the retirement or disposal of an investment property are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