|Extent of IFRS application||Status||Additional Information|
|IFRS Standards are required for domestic public companies||IFRS Standards adopted as Turkish Accounting Standards are required for listed companies, financial institutions, and other public interest entities.|
|IFRS Standards are permitted but not required for domestic public companies|
|IFRS Standards are required or permitted for listings by foreign companies||Required.|
|The IFRS for SMEs Standard is required or permitted||No.|
|The IFRS for SMEs Standard is under consideration||No.|
Kamu Gözetimi, Muhasebe ve Denetim Standartları Kurumu (KGK)
[Public Oversight, Accounting and Auditing Standards Authority]
Role of the organisation
KGK is responsible for setting accounting and auditing standards in compliance with international standards, approving and registering auditors and audit firms, inspecting their activities and taking appropriate action (enforcement authority) against the auditors and audit firms that violate audit provisions and KGK's regulations.
Has the jurisdiction made a public commitment in support of moving towards a single set of high quality global accounting standards?
Has the jurisdiction made a public commitment towards IFRS Standards as that single set of high quality global accounting standards?
What is the jurisdiction's status of adoption?
Turkey has already adopted IFRS Standards for the financial statements of all public interest entities. Specifically, the following entities are required to use IFRS Standards:
- Companies whose securities are traded in a regulated market;
- Intermediary institutions;
- Portfolio management companies;
- Financial lease companies;
- Factoring companies;
- Financing companies;
- Insurance companies;
- Reinsurance companies;
- Pension companies;
- Asset management companies;
- Pension funds;
- Investment firms;
- Collective investment schemes;
- Credit rating agencies;
- Mortgage finance institutions;
- Housing finance and asset finance funds;
- Asset leasing companies;
- Central clearing institutions;
- Central depository institutions;
- Trade repositories;
- Financial holding companies;
- Payment institutions;
- Electronic money institutions;
- Currency offices, precious metals brokerage houses and precious metals producing and marketing companies that are member of Borsa Istanbul.
Additional comments provided on the adoption status?
Entities whose securities are traded in a regulated market, intermediary institutions, and portfolio management companies were permitted to use IFRS Standards as of 2003 voluntarily and have been required to use IFRS Standards since 2005.
Banks have been required to use IFRS Standards since 2006.
Financial lease companies, factoring companies and financing companies have been required to use IFRS Standards since 2007.
Insurance, reinsurance and pension companies have been required to use IFRS Standards since 2008.
The KGK took a Board decision, which was published in the Official Gazette, in which public interest entities are required to apply IFRS Standards in their separate and consolidated financial statements. Thus, asset management companies, investment firms, collective investment schemes, credit rating agencies, mortgage finance institutions, housing finance and asset finance funds, asset leasing companies, central clearing institutions, central depository institutions, trade repositories, financial holding companies, payment institutions, electronic money institutions, currency offices, precious metals brokerage houses and precious metals producing and marketing companies which are members of Borsa Istanbul have been required to apply IFRS Standards in addition to above mentioned companies since 1 January 2013.
Other companies that are not included in the list specified in the decision are permitted to apply IFRS Standards.
If the jurisdiction has NOT made a public statement supporting the move towards a single set of accounting standards and/or towards IFRS Standards as that set of standards, explain the jurisdiction's general position towards the adoption of IFRS Standards in the jurisdiction.
For DOMESTIC companies whose debt or equity securities trade in a public market in the jurisdiction:
Are all or some domestic companies whose securities trade in a public market either required or permitted to use IFRS Standards in their consolidated financial statements?
If YES, are IFRS Standards REQUIRED or PERMITTED?
Does that apply to ALL domestic companies whose securities trade in a public market, or only SOME? If some, which ones?
Are IFRS Standards also required or permitted for more than the consolidated financial statements of companies whose securities trade in a public market?
For instance, are IFRS Standards required or permitted in separate company financial statements of companies whose securities trade in a public market?
For instance, are IFRS Standards required or permitted for companies whose securities do not trade in a public market?
Yes. Required for some and permitted for all others. See the Commitment to Global Financial Reporting Standards section above.
If the jurisdiction currently does NOT require or permit the use of IFRS Standards for domestic companies whose securities trade in a public market, are there any plans to permit or require IFRS Standards for such companies in the future?
For FOREIGN companies whose debt or equity securities trade in a public market in the jurisdiction:
Are all or some foreign companies whose securities trade in a public market either REQUIRED or PERMITTED to use IFRS Standards in their consolidated financial statements?
If YES, are IFRS Standards REQUIRED or PERMITTED in such cases?
Does that apply to ALL foreign companies whose securities trade in a public market, or only SOME? If some, which ones?
Which IFRS Standards are required or permitted for domestic companies?
IFRS Standards as issued by the Board.
The auditor's report and/or the basis of presentation footnote states that financial statements have been prepared in conformity with:
Turkish Financial Reporting Standards (TFRS), which are in full compliance with IFRS Standards.
Does the auditor's report and/or the basis of preparation footnote allow for ‘dual reporting’ (conformity with both IFRS Standards and the jurisdiction’s GAAP)?
Are IFRS Standards incorporated into law or regulations?
If yes, how does that process work?
KGK publishes in the Official Gazette as communiqués TFRS, which are in full compliance with IFRS Standards.
If no, how do IFRS Standards become a requirement in the jurisdiction?
Does the jurisdiction have a formal process for the 'endorsement' or 'adoption' of new or amended IFRS Standards (including Interpretations) in place?
If yes, what is the process?
KGK continuously updates TFRS based on the new or amended IFRS Standards.
If no, how do new or amended IFRS Standards become a requirement in the jurisdiction?
Has the jurisdiction eliminated any accounting policy options permitted by IFRS Standards and/or made any modifications to any IFRS Standards?
If yes, what are the changes?
Other comments regarding the use of IFRS Standards in the jurisdiction?
Are IFRS Standards translated into the local language?
Yes, they are translated into the local language.
If they are translated, what is the translation process? In particular, does this process ensure an ongoing translation of the latest updates to IFRS Standards?
Pursuant to the copyright waiver agreement with the Board, the KGK translates IFRS Standards into Turkish based on the Translation Policy of the Board. This process ensures an ongoing translation of the latest updates in IFRS Standards into Turkish.
Has the jurisdiction adopted the IFRS for SMEs Standard for at least some SMEs?
If no, is the adoption of the IFRS for SMEs Standard under consideration?
Did the jurisdiction make any modifications to the IFRS for SMEs Standard?
If the jurisdiction has made any modifications, what are those modifications?
Which SMEs use the IFRS for SMEs Standard in the jurisdiction, and are they required or permitted to do so?
For those SMEs that are not required to use the IFRS for SMEs Standard, what other accounting framework do they use?
KGK developed the Financial Reporting Standard for Large and Medium Sized Entities (BOBI FRS) based on the requirements in the EU Accounting Directive, the IFRS for SMEs Standard, FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and local Turkish GAAP and published it in the Official Gazette on 29 July 2017. BOBI FRS is effective from the reporting periods beginning on or after 1 January 2018.
BOBI FRS is the financial reporting framework for entities, which are not required to apply TFRS but are within the scope of entities subject to audit.
BOBI FRS was designed to meet the financial reporting needs of large and medium sized entities and is a standalone standard with 27 sections and less than 240 pages. It provides a cost-effective way of financial reporting for medium-sized entities and additional obligations were introduced for large-sized entities in line with the "think small first" approach in the EU Accounting Directive.
The main differences between BOBI FRS and the IFRS for SMEs Standard (2015) are summarised as below. In BOBI FRS:
- other comprehensive income is not presented;
- expenses can only be reported by function in the statement of profit or loss;
- consolidation and deferred tax requirements are mandatory only for large-sized entities;
- the use of fair value is not allowed to account for investments in subsidiaries, associates and jointly controlled entities;
- all fixed production overheads are allocated to the cost of conversion of inventories;
- the revaluation model may be used after initial recognition of intangible assets (other than goodwill) instead of the cost model;
- a requirement for capitalising development costs when specified criteria are met has been added;
- there is an exception for the recognition of financing components for revenues and borrowing costs that are due in one year or less, as a practical expedient;
- a requirement that the useful life of intangible assets must be between 5 to 10 years if no reliable estimate can be made (rather than management’s best estimate but subject to a maximum of 10 years);
- a requirement for capitalising borrowing costs on qualifying assets has been added;
- there are specific classification and measurement requirements for financial instruments;
- the classification of a lease depends on whether the lease meets specific criteria that is in line with local tax regulations;
- a requirement to specifically allow the pooling of interest method to be applied to combinations of entities under common control has been added;
- for large-sized entities more detailed disclosures are required for related party disclosures;
- a section on interim reporting has been added;
- a detailed section about financial statement disclosures has been added;
- investment property can be subsequently measured by using fair value model or cost model;
- an accrual option for government grants has been added; and
- the historical cost method for all biological assets is permitted.
Other comments regarding use of the IFRS for SMEs Standard?
The IFRS for SMEs Standard of July 2009 has been translated into Turkish.
General requirements for companies for-profit entities
Public interest entities are subjected to the Public Oversight Accounting and Auditing Standards Authority of Turkey (KGK) Legislation. The frequency of disclosure of financial statements is as listed below:
- Quarterly reports by listed companies, investment firms, portfolio management companies;
- Semiannual reports by small cap companies; and
- Annual reports by all types of funds.
General requirement for companies
What type or format of structured electronic filing is required or permitted?
Currently, PDP requires financial statements to be prepared in XML format and to be accompanied by footnotes in PDF format.
Meanwhile, there is an ongoing project on transforming the PDP database into XBRL. The new XBRL reporting system will be used for financial disclosures, corporate action, material events announcements and other regulated disclosure obligations. The project is expected to be implemented in 2016.
What is the purpose of the electronic filing?
What documents are required to be filed to the electronic filing system?
Is the financial data provided in XBRL format publicly available?
Is the XBRL reporting system based on the IFRS Taxonomy issued by the IASB?
If no, what are the reasons for not using the IFRS Taxonomy?
Is the IFRS for SMEs filing adopted in the XBRL reporting system?
If no, are there any plans to implement the IFRS for SMEs filing in the future?
How is the XBRL financial statement reporting system set up?
What is (are) the intended purpose(s) of the local base taxonomy?
Which IFRS Taxonomy files are used?
Which part(s) of the IFRS (local) Taxonomy do filer's submissions import/refer to?
Are filers permitted to replace or override any aspects or specified features of the IFRS (local) Taxonomy?
If yes, which aspects and how does this work?
What is the scope or coverage of XBRL filing/tagging?
- Financial statement (Face statements/Primary financial statements)
- Form-based filing (for corporate actions)
Are there any plans to extend the coverage of the XBRL filing/tagging in the future?
Which version of the IFRS Taxonomy is being used
If the taxonomy is to be updated to the 2014/2015 version, which of the following module(s) is (are) to be used?
Any guidelines or submission rules for filers?
Do bodies in this jurisdiction use XBRL for purposes other than general purpose financial reports? (For example, taxation authorities, statistical purposes etc.)
- The Revenue Administration of Turkey applies the XBRL-GL taxonomy as its mandatory data archival format for e-bookkeeping.
- In addition to electronic bookkeeping, the TTIB is planning to establish a continuous monitoring and auditing system and to create a paperless auditing environment for large-scale taxpayers in Turkey. The Board also wants to create an instance document analyser to automate various auditing processes.
- In addition, the TTIB has introduced a Supply Chain Monitoring and Auditing Project for a group of large taxpayers. XBRL GL is used as the main filing standard for audit purposes. The objective of the project is to build a continuous monitoring and auditing information system for the sales and production of the goods covered by the special consumption tax. For that purpose, we made a private regulatory extension to the XBRL-GL taxonomy for the purpose of reporting between taxpayers and the TTIB. Filers report according to the standards set by the TTIB without any emphasis on the IFRS Taxonomy. In order to set standards for taxpayers in filing sales and production operations in XBRL-GL, general and specific guidelines were prepared, which provide detailed information about the taxonomy's elements to be used in reports. Because the webpage can only be accessed through VPN connection, we cannot provide any link for these guidelines.
Purpose of filing:
The filing is analysed by the Tax Inspector in charge of the tax audit to evaluate the consistency and correctness of the taxes declared and paid by the taxpayer, but this never shared with any other organisation or made publicly available, because of tax secrecy.
Purpose of structured digital filing:
- Lessen the burden of declaration process for tax offices
- Lessen the burden of declaration process for taxpayers
- Facilitate audit of bookkeeping.
Role of the organisation
POA is a public legal entity with administrative autonomy. The main function of POA is to set accounting, auditing and ethics standards, approve and register auditors and audit firms and perform oversight and inspections of them. POA has a strategic objective of setting standards in full compliance with the International Standards. In order to achieve its function, POA has signed a copyright agreement with IFAC and IASB.
As a public authority, POA determines both the scope of the implementation of TFRS (issuers, capital market institutions, banks, finance leasing companies, factoring companies, finance companies, insurance companies and some of the large-scale companies) and the other entities that have to implement Turkish Local GAAP.
Capital Markets Board of Turkey (CMB)
Role of the organisation
The Capital Markets Board of Turkey (CMB) is the regulatory and supervisory authority for the securities markets and institutions in Turkey. The CMB determines the operational principles of the capital markets and is responsible for the protection of the rights and interests of investors. CMB regulates and supervises public companies, listed companies, investment companies, exchanges, mutual, closed-end funds and pension funds, leveraged transactions on foreign exchange and precious metals, Settlement and Custody Bank (Takasbank), Turkish Capital Markets Association (TCMA), Central Securities Depository (CSD), Investor Compensation Center (ICC) and other related institutions operating in the capital markets, such as independent audit firms, rating agencies, appraisal firms, asset leasing companies, market operators and trade repositories.
CMB is empowered by Capital Market Law to regulate the disclosure requirements of all publicly held (listed) companies and capital markets institutions. According to CMB regulation, all listed companies and capital markets institutions prepare their financial statements according to TFRSs (the Turkish version of IFRSs) and file them electronically on the Public Disclosure Platform.
Central Registry Agency Inc. (MKK)
Role of the organisation
(MKK) is the legally authorised central securities depository for Turkish capital markets. MKK is also responsible for the operation of the Public Disclosure Platform (PDP), which is an electronic disclosure system for issuers and other institutions of capital markets. Listed companies and ETFs, investment firms, mutual funds, pension funds, portfolio management companies and foreign funds have to submit their notifications to PDP. These notifications include financial statements, corporate actions, material events and other notifications.
Turkish Tax Inspection Board (TTIB)
Role of the organisation
The Turkish Tax Inspection Board's (TTIB) main functions can be summarised as planning and executing tax audits, carrying out official investigations, inspecting fiscal bodies and combatting with underground economy, corruption and money laundering. It is also the main body responsible to examine the consistency and correctness of the fiscal statements for tax related purposes.
Turkish Revenue Administration
Role of the organisation
The role of Revenue Administration is to collect taxes, to prevent the existence of an underground economy and to increase voluntary compliance. There are several electronic projects in progress. In particular, an e-bookkeeping project and similar projects are being implemented to facilitate the filling of financial statements.