CELEBI GROUND HANDLING ANNUAL REPORT 2018

ÇELEBİ HAVA SERVİSİ A.Ş. 67 Çelebi Ground Handling 2018 Annual Report Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2018 (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.) 2.3 Changes in Significant Accounting Policy and Estimations 2.3.1 Changes in Significant Accounting Policy The significant accounting policies used in preparing the consolidated financial statements for the year ended December 31, 2018 are consistent with the accounting policies disclosed in detail in the financial statements for the year ended December 31, 2017, except for the TFRS 9 Financial Instruments standard effective as of January 1, 2018. Effects on consolidated financial statements The Group has applied TFRS 9 Financial Instruments and TFRS 15 Revenue from Contracts with Customers in the fiscal period that started on 1 January 2018 and the related standards are explained below and their current accounting policies are explained in Note 2.4. In the consolidated financial statements of the Group, there is no significant effect resulting from implementation of TFRS 15 Revenue from Contracts with Customers Standard. TFRS 9 Financial Instruments Impact Measurement Classification and Measurement Group classifies its financial assets in three categories of financial assets measured at amortized cost, financial assets measured at fair value through other comprehensive income and financial assets measured at fair value through profit of loss. The classification of financial assets is determined considering the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. The appropriate classification of financial assets is determined at the time of the purchase. TFRS 9 removes loans and receivables and available-for-sale financial asset categories included in the current TAS 39 standard. Changes regarding the classification of financial assets and liabilities in terms of TFRS 9 are summarised below. Related changes in classification do not result in changes in measurement of the financial assets and liabilities. Classification under TAS 39 Classification under TFRS 9 Financial assets Cash and cash equivalents Loans and receivables Amortised cost Financial asset Available for sale Fair value through other comprehensive income Trade receivables Loans and receivables Amortised cost Other receivables Loans and receivables Amortised cost Financial liabilities Borrowings Amortised cost Amortised cost Trade payables Amortised cost Amortised cost Other payables Amortised cost Amortised cost Impairment: The Group allocates impairment provision for the following financial assets according to the expected credit loss model: • Trade receivables • Cash and cash equivalents • Financial investments • Other receivables The Group uses the simplified approach in TFRS 9 to calculate the expected credit losses of such financial assets. This method requires the recognition of expected life-time losses for all trade receivables. According to new impairment provision model applied in accordance with TFRS 9, In the consolidated financial statements, the Group has accounted an additional provision for impairment of TL 4.431.612. The effect of the provision on net profit for the year 2018 is TL 3.754.188.