BIRLESIM_MUEHNDSILIK 2023 AR

BİRLEŞİM MÜHENDİSLİK 2023 ANNUAL REPORT 158 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) Property, plant, equipment, and related depreciation Property, plant and equipment are carried at cost less accumulated depreciation and permanent impairment. Depreciation is provided on a straight-line basis based on the approximate economic useful lives taken into consideration. The useful lives of property, plant and equipment are as follows Useful Life Buildings 50 years Machinery and equipment 4 - 20 years Vehicles 5 years Furniture and Fixtures 3 - 15 years Other tangible Assets 3 years Leasehold Improvements 3 - 15 years Land and parcels are not depreciated as it is deemed to have an indefinite life. Intangible assets Intangible assets are carried at cost at first and carried at cost less accumulated amortization and impairment for the following periods. An intangible asset is recognized if it meets the identifiability criterion of intangibles, control exists over the asset; it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the costs can be measured reliably. Amortization of intangible assets is allocated on a systematic pro-rata basis using the straight-line method. Intangible assets including acquired rights, information systems and computer software are amortized using the straight-line method over their estimated useful economic lives of 3-15 years. Goodwill Goodwill arising from acquisitions of subsidiaries is presented in intangible assets. The amount of goodwill arising on the acquisition transaction is valued at the acquisition date after deducting the provision for impairment. For impairment testing, goodwill is allocated to cash-generating units (or groups of cash-generating units) that are expected to benefit from the synergy of the Group. The cash-generating unit, where the goodwill is allocated, is tested for impairment annually. If there is any indication that the unit is impaired, the impairment test is performed more frequently. If the recoverable amount of the cash-generating unit is less than the carrying amount, then the provision for impairment is first set aside from the goodwill allocated to the unit, then the carrying amount of the assets within the unit is reduced. Any impairment loss for goodwill is recognized directly in profit or loss in the consolidated income statement. Goodwill impairment provision is not reversed in subsequent periods. During the sale of the relevant cash-generating unit, the amount determined for goodwill is included in the calculation of profit/loss in the sales transaction.