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18. EMPLOYEE BENEFITS OBLIGATION
Under the Turkish Labor Law, the Group is required to pay termination benefits to each employee whose employment is terminated without due cause, is called up for military service,
dies or who retires after completing 25 years of service (20 years for women), achieves the retirement age (58 for women and 60 for men) if the employee has completed one year of
service. The amount payable consists of one month’s salary limited to a maximum for each year of service as of 31 December 2014 of TL 3,438.22 (USD 1,482.69) (2013: TL: 3,254.44
USD 1,524.83).
The maximum payment for retirement payment liability per year of employment is increased to TL 3,541.37 (USD 1,527.17) as of 1 January 2014.
International Accounting Standard No. 19 (“IAS 19”) “Employee Benefits” requires actuarial valuation methods to be developed to estimate the enterprise’s obligation under defined
benefit plans. As detailed in Note 18, such actuarial gains/losses are recognized within other comprehensive income starting from 31 December 2012.
IFRS requires actuarial valuation methods to be developed to estimate the Group’s obligation under defined benefit plans. The provision has been calculated by estimating the present
value of the future probable obligation of the Group arising from the retirement of the employees. Accordingly, as of 31 December 2014 and 2013, the following actuarial assumptions
were used in the calculation of the liability:
31 December 2014
31 December 2013
Interest rate
9.7% - 10.2%
9.7 % - 10.2 %
Expected rates of salary/limit increases
6.00%
6.00%
Turnover rate
2%
2%
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)
Movements of the provision for employee benefits obligation during the years ended 31 December 2014 and 2013 are as follows: