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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
3.31 Interests in joint operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the
arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent
of the parties sharing control.
When a group entity undertakes its activities under joint operations, the Group as a joint operator recognises in relation to its interest in a joint operation:
• Its assets, including its share of any assets held jointly.
• Its liabilities, including its share of any liabilities incurred jointly.
• Its revenue from the sale of its share of the output arising from the joint operation.
• Its share of the revenue from the sale of the output by the joint operation.
• Its expenses, including its share of any expenses incurred jointly.
The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in accordance with the IFRSs applicable to the particular assets, liabilities,
revenues and expenses.
When a group entity transacts with a joint operation in which a group entity is a joint operator (such as a sale or contribution of assets), the Group is considered to be conducting the
transaction with the other parties to the joint operation, and gains and losses resulting from the transactions are recognised in the Group’s consolidated financial statements only to the
extent of other parties’ interests in the joint operation.
When a group entity transacts with a joint operation in which a group entity is a joint operator (such as a purchase of assets), the Group does not recognise its share of the gains and
losses until it resells those assets to a third party.
When a group entity transacts with its jointly controlled entity, profits and losses resulting from the transactions with the jointly controlled entity are recognized in the Group's consolidated
financial statements only to the extent of interests in the jointly controlled entity that are not related to the Group.
3.32 Derivative Financial Instruments
The Group uses derivative financial instrument such as forward currency contracts to hedge its risks associated with foreign currency fluctuations and interest rate swaps to manage its
exposure to interest rate risk.
The Group is exposed to foreign currency rate risk on purchases and borrowings that are denominated in a currency other than the USD. The Group is also exposed to interest rate risk
due to bank loans.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each balance sheet date. The
resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as hedging instrument, in which event the timing of the recognition in
profit or loss depends on the nature of the hedge relationship. The Group designates certain derivatives as hedges of highly probable forecast transactions or hedges of foreign currency
risk of firm commitments (cash flow hedges).
BORUSAN HOLDING A.Ş. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014
(Currency - US Dollars (“USD”) unless otherwise indicated)