BIRLESIM_MUEHNDSILIK 2023 AR

BİRLEŞİM MÜHENDİSLİK 2023 ANNUAL REPORT 159 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) Impairment of assets excluding goodwill At each balance sheet date, the Group assesses whether there is any indication that the carrying value of tangible and intangible assets is reduced by deducting accumulated depreciation from their cost value. If there is such an indication, the recoverable amount of the asset is estimated in order to determine the amount of the impairment. In cases where it is not possible to calculate the recoverable amount of an asset alone, the recoverable amount of the cash-generating unit to which the asset belongs is calculated. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When calculating the value in use, the future cash flows are discounted to their present value using a pre-tax discount rate that reflects the time value of money and the risks specific to the asset. The main assumptions used in these studies are the inflation expectations in the coming years, the expected increases in sales and costs, the expected changes in the internal market composition and the expected country growth rates. If the recoverable amount of the asset (or cash-generating unit) is less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. Impairment losses are recognized in the consolidated statement of profit or loss. The increase in the carrying value of the asset (or cash-generating unit) due to the cancellation of the impairment should not exceed the carrying amount of the asset (net amount remaining after depreciation) if the impairment loss was not included in the financial statements in previous years. An impairment loss is recognized in the consolidated statement of profit or loss. Impairment is not reversible in future periods. Financial Assets Classification and Measurement The Group classifies its financial assets in three categories as financial assets at fair value through profit or loss, whose fair value changes are accounted for at amortized cost. The classification is based on the business model used by the entity for the management of financial assets and the characteristics of the contractual cash flows of the financial asset. The Company makes the classification of its financial assets on the date of purchase Financial assets measured at amortized cost are financial assets that are held under a business model that aims to collect contractual cash flows and that are not traded in an active market where cash flows that include interest payments on principal dates and principal balances at certain dates in the contractual terms. Financial assets that are recognized at amortized cost include cash and cash equivalents and trade receivables. The related assets, with their fair values in the initial recognition of financial statements; in subsequent accounting, it is measured at amortized cost using the effective interest rate method. Discounted trade receivables for which provisions for doubtful receivables are accrued within the scope of TFRS 9 are assumed to approximate the fair values of these assets. Gains and losses resulting from the valuation of non-derivative financial assets measured at amortized cost are recognized in the income statement. Financial assets at fair value through profit or loss are comprised of financial assets measured at amortized cost except for financial assets at fair value through profit or loss. Gains and losses arising from the valuation of such assets are recognized in the income statement.