BIRLESIM_MUEHNDSILIK 2023 AR

BİRLEŞİM MÜHENDİSLİK 2023 ANNUAL REPORT 152 Birleşim Mühendislik Isitma Soğutma Havalandirma Sanayi Ticaret A.Ş. and its Subsidiaries (Amounts are expressed in terms of purchasing power of Turkish Lira (“TL”) as of December 31, 2023 unless otherwise stated.) Notes to the Consolidated Financial Statements For the Year Ended 31 December 2023 2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) (j) New and Revised Financial Reporting Standards The accounting policies used in the preparation of the consolidated financial statements for the year ending 31 December 2023 have been applied consistently with those used in the previous year, except for the new and amended TFRS standards and TFRYK interpretations valid as of 1 January 2023, summarized below. The effects of these standards and interpretations on the Group’s financial position and performance are explained in the relevant paragraphs. a) New Standard, Amendments and Interpretations Effective January 1, 2023 TFRS 17 - Insurance Contracts In February 2019, POA published TFRS 17, a comprehensive new accounting standard covering recognition and measurement, presentation and disclosure for insurance contracts. TFRS 17 introduces a model that enables both the measurement of liabilities arising from insurance contracts with their current balance sheet values ​and the recognition of profit throughout the period in which the services are provided. Some changes in future cash flow estimates and risk adjustment are also recognized over the period in which services are provided. Entities may choose to recognize the effects of changes in discount rates in profit or loss or other comprehensive income. The standard contains specific guidance for the measurement and presentation of insurance contracts with participation features. TFRS 17 will enter into force in annual accounting periods starting on or after January 1, 2023, and early application is allowed for businesses that apply TFRS 9 Financial Instruments and TFRS 15 Revenue from Customer Contracts on or before this date. According to the changes published by the POA in December 2021, businesses have the transition option for “overlapping classification” in order to eliminate possible accounting mismatches between financial assets and insurance contract liabilities included in the comparative information presented when TFRS 17 was first applied. The application of TFRS 17 did not have a significant impact on the Group’s consolidated financial statements. TAS 1 Amendments - Classification of Liabilities as Short and Long Term In January 2021, KGK made changes to the “TMS 1 Presentation of Financial Statements” standard. These changes, which are effective for annual reporting periods starting on or after January 1, 2023, provide clarifications on the criteria for long and short term classification of liabilities. The changes made must be applied retrospectively in accordance with TAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”. Early application is allowed. This amendment to TAS 1 did not have a significant impact on the Group’s consolidated financial statements. TMS 1 Amendments - Disclosure of Accounting Policies In August 2021, the POA published amendments to IAS 1 in which it provides guidance and examples to help businesses apply materiality estimates to accounting policy disclosures. Since there is no definition of the term “significant” in TFRS, the POA has decided to replace this term with the term “significant” in the context of accounting policy information disclosure. ‘Material’ is a defined term in TFRS and is largely understood by financial statement users according to the POA. When assessing the materiality of accounting policy information, entities must consider both the size of transactions, other events or conditions, and their nature. Additionally, examples of situations in which the business may consider accounting policy information as material are included. The changes published in TMS 1 are valid for annual accounting periods starting on or after January 1, 2023. This amendment to TAS 1 did not have a significant impact on the Group’s consolidated financial statements.