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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
3.33 Significant Accounting Judgments and Estimates
(continued)
Derivatives
The fair value of forward exchange contracts and option contracts are based on their listed market price, if available. If a listed market price is not available, then fair values are derived
from inputs other than quoted prices that are observable for the asset or liability or are derived by discounting the difference between the contractual forward price and the current
forward price for the residual maturity of the contract using a risk-free interest rate (based on government bonds) or option pricing models.
Impairment of goodwill and intangible assets of indefinite useful lives
The Group tests annually whether goodwill and intangible assests of indefinite useful lives have suffered any impairment, in accordance with the accounting policy stated in Note 3. The
recoverable amounts of cash-generating units have been determined based on value-in-use calculations.
Valuation of licenses, license applications and goodwill recognized on business combination
Valuation of the Group’s licenses and license applications was based on discounted cash flows of each projects to determine the fair value of licenses and license applications. Valuation
of the Group’s licenses and license applications was conducted to serve as a basis for allocation of the purchase price to the various classes of assets acquired in accordance with IFRS
3 Business Combinations. For IFRS 3 purposes, fair value is defined as the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties.
In determining the fair value of the licenses and license applications, the Group adopted a "risk-weighted discounted cash flow" methodology whereby the discounted cash flows of each
project, are adjusted by a risk factor. The risk factors are determined by the Group Management following the due diligence conducted for each project, and take into account various
criteria, including the status of the project, licensing status as well as perceived regulatory, environmental and feasibility risks.
4. CHANGES IN GROUP’S ORGANIZATION
The following transactions took place during 2014, which resulted in changes in Group’s organization:
Throughout the year 2014, Borusan Holding purchased additional shares of Borusan Yatırım for USD 507,122 from Istanbul Stock Exchange increasing its direct shareholding to 36.29%
from 36.01%. The Group purchased shares of some of group companies from its shareholders in the current year. The carrying amounts of the Group's interests and the non-controlling
interests are adjusted to reflect the changes in their relative interests in the subsidiaries. The difference between the carrying amount and the consideration paid is recognized directly in
equity as it is a change in ownership interest and does not result in a change in control.
5. DIVIDENDS
In 2014, a dividend of USD 1,855 (2013: USD 3,368) per thousand share (total USD 10,397,502) (2013: USD 18,878,738) was paid to shareholders.
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)