BIRLESIM_MUHENDISLIK 2023 ANNUAL REPORT

BİRLEŞİM MÜHENDİSLİK 2023 ANNUAL REPORT 169 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) Significant accounting judgments and estimates The preparation of financial statements according to CMB Communiqué No: II/14.1 require management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Those estimates are reviewed periodically, and as adjustments become necessary, they are reported in earnings in the periods in which they become known. The key assumption concerning the future and other key sources of estimation uncertainty at the statement of financial position date and the significant judgments with the most significant effect on amounts recognized in the financial statements are set out below; a) In computing the amortized cost of trade receivables and payables using the effective interest method, the expected collection and payment dates in the light of available information were considered. The amount of interest income and interest expense included in the purchase cost and sales income arising from credit sales and purchases was computed by using the receivable and payable turnover rates for the period, based on the effective interest rate method and was reclassified to financial income and financial expenses The unearned interest income and expenses included in the purchase cost and sales revenue arising from credit sales and purchases during the current period was computed on an estimated basis by using the average trade receivable. Accordingly, the purchase cost and sales revenue were discounted and the difference between the discounted amounts and the nominal amounts were recognized as interest revenue or expense. Data for computing the finance charges included in the stock purchases on credit basis was directly obtained from the accounting system. Therefore the determination of finance charges was done on the basis of specific due dates involving the stock purchases. b) Reserve for employment termination benefit was determined by using actuarial assumptions related to discount rate, future salary increases and employee turnover rate. Reserve for employment termination benefit was determined by using actuarial assumptions related to discount rate, future salary increases and employee turnover rate. As the calculation of severance pay, discount rate is calculated by dividing yearly numbers of voluntary employee withdrawal to average personal number. Employee termination benefit liability was calculated according to assumption of future employee leave and was discounted on the basis of related discount rates. The ratio of employees likely to continue to work is taken as approximately 91%. c) The Group provides allowance for the overdue doubtful receivables by considering customers financial position, past experience and other factors and evaluating customers credit standing. d) The Group estimates the fair values of its investment properties which are held either to earn rental or for capital appreciation by considering available current market values as well as property values declared on real estate tax returns and determined if any impairment occurred in their carrying amounts. The estimates used are explained in the related accounting policies and notes.