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101
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
3.9 Related Parties
Parties are considered related to the Group if;
(a) directly, or indirectly through one or more intermediaries, the party
(i) controls, is controlled by, or is under common control with the Group (this includes parent, subsidiaries and fellow subsidiaries);
(ii) has an interest in the Group that gives it significant influence over the Group; or
(iii) has joint control over the Group;
(b) the party is an associate of the Group;
(c) the party is a joint venture in which the Group is a venturer;
(d) the party is member of the key management personnel of the Group as its parent;
(e) the party is a close member of the family of any individual referred to in (a) or (d);
(f) the party is an entity that is controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in
(d) or (e);
A related party transaction is a transfer of resources, services or obligation between related parties, regardless of whether a price is charged.
Disclosures regarding related party transactions and outstanding balances are given in Note 34.
3.10 Inventories
Inventories are valued at the lower of cost or net realizable value (“NRV”) after provision for obsolete items. Cost is determined using the monthly weighted average method or specific
identification method depending on nature of production or actual cost for trading goods. Cost of work in progress and finished goods inventories include materials, direct labor and an
appropriate portion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Net realizable value is the estimated selling price
in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale. Unrealizable inventory has been fully written off. When the
circumstances that previously caused inventories to be written down below cost no longer exist or when there is clear evidence of an increase in net realizable value because of changed
economic circumstances, the amount of the write-down is reversed. The reversal amount is limited to the amount of the original write-down.
3.11 Property, Plant and Equipment
Property, plant and equipment (“PP&E”) is initially stated at cost, excluding the costs of day to day servicing, less accumulated depreciation and accumulated impairment in value.
Such costs which are initially recognized include the cost of replacing part of such property, plant and equipment when that cost is incurred if the recognition criteria are met. Following
initial recognition at cost, land, buildings, flat steel and steel pipe machinery are carried at revalued amounts, which is the fair value at the date of the revaluation less any subsequent
accumulated depreciation and subsequent accumulated impairment losses.
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)