BIRLESIM_2021_ANNUAL REPORT

BİRLEŞİM MÜHENDİSLİK 2021 ANNUAL REPORT 171 Birleşim Mühendislik Isıtma Soğutma Havalandırma Sanayi Ticaret A.Ş. and Its Subsidiary (All amounts expressed in Turkish Lira (“TL”)) Notes to the Consolidated Financial Statements For the Year Ended 31 December 2021 2. BASIS OF PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) (k) Summary of significant accounting policies and assessment methods (continued) Government incentive and granted Government donations are recorded at their fair values when there is a reasonable assurance that the donations will be received and that the Group meets the conditions that it is obliged to comply with. Government grants of costs are recognized as revenue on a consistent basis over the relevant periods when they match the costs they will cover. Government grants related to property, plant and equipment are classified in the “Deferred Income” account within the liabilities and are recorded as income in the profit or loss statement by applying straight-line depreciation over their useful lives. Treasury Shares The company made an agreement with an intermediary institution and purchased shares at the price on the date of purchase from the stock exchange within the scope of the liquidity provider agreement. The said shares, purchase and sale transactions are recorded and derecognised according to the “settlement date”. Losses and gains resulting from purchase and sale transactions are presented under income from investments in the profit or loss statement. As a result of the purchase and sale transactions, the Company has classified the repurchased shares under “Treasury Shares” under equity. (l) Significant accounting judgements, estimates and assumptions In the process of applying accounting policies, which are described in Note 2.k, management has made the following judgments that have the most significant effect on the amounts recognized in the consolidated financial statements. Change in contract fee Changes in contract fees are recognized in the financial statements to the extent that those changes are likely to be approved by the customers, based on the percentage of completion method of the construction projects. Estimates on the collection of those changes are made based on the Group management’s past experiences, the related contract terms and the related legislation. Percentage of completion The Group uses the percentage of completion (POC) method in accounting for its construction contracts. Use of the percentage of completion method requires the Group to judge and estimate the proportion of work performed to date as a proportion of the total work to be performed. Non-current retention receivables Non-current retentions receivable and payable are stated at their fair value each period end by discounting the Group’s effective deposit and borrowing rates respectively, which management considers to be the appropriate discount rates for these assets and liabilities.’