BIRLESIM_MUEHNDSILIK 2023 AR

BİRLEŞİM MÜHENDİSLİK 2023 ANNUAL REPORT 157 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) (k) Summary of Significant Accounting Policies (Continued) Trade receivables Trade receivables are carried at amortized cost using the effective interest rate method and, if any provision for doubtful receivables, after it is deducted. Notes and postdated checks classified as trade receivables are carried at their discounted values by discounting them with the effective interest rate method. Within the scope of TFRS 9, provision for doubtful receivables is recorded as expense. If there is a concrete indication that overdue receivables cannot be collected, provision for doubtful receivables is made considering the collaterals received from the customer. The Company uses the simplified approach in TFRS 9 to calculate the expected credit losses of these financial assets. This method requires the recognition of lifelong expected credit losses for all trade receivables. Trade payables Trade and other payables are recorded with the amortized cost which represents the current market value of invoiced or not invoiced amount of future purchases of goods and services. Maturity difference finance income/expenses Maturity difference finance income/(expenses) means the income/(expenses) attributable to forward purchases and sales. Such income/(expense) is recognized as finance income and expense from forward purchases and sales during the period and is included in other operating expenses and income during the term. Inventories Inventories are valued at the lower of cost or net realizable value. Cost of inventories is calculated on first in first out (“FIFO”) basis. Cost of inventories is composed of the purchase costs of goods. Net realizable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses. Financing costs incurred for inventories purchased on deferred settlement terms are excluded from the cost of inventories.