BIRLESIM_2022 ANNUAL REPORT

BİRLEŞİM MÜHENDİSLİK 2022 FAALİYET RAPORU 147 Birleşim Mühendislik Isıtma Soğutma Havalandırma Sanayi Ticaret Anonim Şirketi and Its Subsidiaries (Currency in Turkish Lira (“TL”) unless otherwise stated). Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022 2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued) 2.8 Summary of Significant Accounting Policies (Continued) Extension and early termination options The lease obligation is determined by considering the extension and early termination options in the contracts. The majority of the extension and early termination options in the contracts are options that are jointly applicable by the Group and the lessor. The Group determines the lease term by including the extension and early termination options at the Group’s discretion under the relevant agreement and if the use of the options is reasonably certain. If there is a significant change in the circumstances, the assessment is reviewed by the Group. Taxation on income Tax liability on current period’s profit or loss includes current period tax and deferred tax. Current Period Tax Current tax liability includes the tax payable on the taxable income for the period using the tax rates enacted by the balance sheet at the balance sheet date and the tax legislation in effect. Deferred Tax Deferred income tax is provided in terms of temporary differences between the carrying amounts of assets and liabilities and their carrying values for financial reporting. The tax value of assets and liabilities represent the amounts that will affect the tax base in the future periods related to the assets and liabilities within the framework of tax legislation. Deferred income tax is calculated at the tax rates that are expected to apply in the period in which the tax asset will be realized or the liability will be realized by taking into consideration the tax rates and tax legislation in effect as of the balance sheet date. Deferred tax assets or liabilities are reflected to the financial statements at the rate of increase and decreas expected to be incurred in the future taxable period in which the temporary differences will be eliminated. Deferred tax liabilities are recognized for all taxable temporary differences, where deferred tax assets resulting from deductible temporary differences are recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary difference can be utilized. The carrying amount of a deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of the deferred tax asset to be obtained. Provision for employment termination benefits In accordance with the provisions of the existing laws and labor bargaining agreement, severance pay is paid in the event of retirement and dismissal. To comply with the Revised TAS 19 “Employee Benefits” Standard (“TAS 19”) these types of payments are qualified as defined retirement benefit plans. The Group has reflected a liability expected to arise in the future due to the retirement of employees in the future and discounted to net present value. All actuarial gains and losses have been recognized in the income statement. The ratio of employees likely to continue employment was taken as 91%. As of the balance sheet date, the actuarial assumptions used in calculation are as follows: 31.12.2022 31.12.2021 Discount rate 12,70% 20,00% Inflation rate 9,50% 14,80% Pension plans The Group does not have any transactions that are subject to valuation within the scope of the pension plans section.