Financial Reporting and Accounting Advisory Services

We can help you assess the effects of standard changes on your financial statements and your business, create a roadmap on how to apply the standard changes, provide consultancy on accounting and other technical issues, choose and apply software in case of need, adapt your business processes to the new standard and train the teams. 

Explore more;

• IFRS 16 Leases 
• IFRS 17/TFRS 17 Insurance Contracts

In today's rapidly changing world, the only constant agenda item of business life for the companies which are in a race to get one step ahead of the competition is mergers and acquisitions. Companies face increasingly complex International Financial Reporting Standards (“IFRS”) and American Generally Accepted Accounting Principles (“US-GAAP) requirements throughout all deals. After the Sales and Purchase Agreement (“SPA”) is signed, it can be late to understand and measure the effects of the transaction along with the integration of the two companies on financial statements, key financial and operational indicators, reporting processes and systems. For this reason, PwC provides consultancy throughout the whole process with its team specialized in deals transactions.

We can help you with the following detailed issues during the purchasing process:

• Compilation and review of the financial statements in accordance with the Turkish Financial Reporting Standards ( "TFRS"), IFRS, US-GAAP or required reporting framework
• Interpretation, analyzing and reporting of the impact of complex accounting standards like IFRS 9 “Financial Instruments”, IFRS 15 “Revenue from Customer Contracts”, IFRS 16 “Leases” and IFRIC 12 “Privileged Service Contracts” on financial information
• Analysis of the financial model prepared during the deals
• Preparation of the pro forma financial information
• Compilation the restructured “Carve out” financial information
• After signing of the SPA, preparation of the opening balance sheet as of the date of acquisition within the required reporting framework of the buyer
• Preparation of the diagnostic analysis for the accounting policies and applications differences between buy side and sell side and supporting during post deal period.
• Supporting in adapting acquired company’s the financial reporting systems and processes to buyer’s company

We can help you with the following detailed issues during the annual reports and other accounting processes:

• Compilation of the mandatory annual report required by the Turkish Commercial Code (“TCC”)
• Review of the financial information included in the annual report
• Preparation of comprehensive annual reports according to the company’s needs and requirements.
• Providing the temporary support of managers and staff have expertise on IFRS/ TFRS for finance, financial affairs, management reporting, and budget related activities (interim assignments).
• Providing remote support in all kinds of financial processes and reporting services

Whatever capital increase you are planning, wherever you are in the world, PwC supports you every step of the way!

Our global network of advisors enables us to continually analyse developments and trends in markets across the world, and we use this ability to provide benefits to our clients.

For more information:

• Initial Public Offering (IPO)
• Debt Instruments Issuance (Debt Offering)

Management reports are one of the most important tools for companies to understand their past performances and plan for the future in today's rapidly changing and digitalized world. The detail level of management reports used by the managers in the decision-making processes, the reliability of the figures and the quickness of generation of these figures are important for making the right decisions at the right moments. In today's world, where the business environment changes very rapidly, companies need to predict impact of changes, to measure risks and to make scenario basis analysis for deterime road map that they require management reporting approach at the level of today's information technologies adopted to digitalizing world enables advantage at competititve environment rather than traditional management reports. In the digital age, management reporting should support managers in measuring the company's performance and understanding the root causes of fluctuations as well as predicting the future and making decisions regarding these scenarios.

For converting the management reports as a meaningful and reliable supporting decision-making tool, they should include key performance indicators / KPIs in line with the short, medium and long term goals of the companies and also it should be prepared in agreement with financial statements.  Futher, the management reports which are designed to be accessible and to provide detailed information when necessary allow to have an opportunity for saving time for analysis and planning for the decision-making rather than data preparation.

IFRS 9 fundamentally changed the accounting for financial instruments. The three key areas are Classification & Measurement (amortised cost, fair value with changes recognised in OCI or fair value with changes recognised in P&L), Impairment (forward-looking expected credit loss model) and Hedge accounting (rules have been eased in general).

Classification & Measurement

IFRS 9 requires that all financial assets are subsequently measured at:

• Amortized cost
• Fair value through other comprehensive income (FVOCI),
• Fair value through profit or loss (FVPL)

Whether a financial asset is classified as amortized cost, FVOCI or FVPL is mainly based on the business model assessment and the SPPI-Test (Solely Payments of Principal & Interest).

This might be the least complex area of the standard but for Banks and other financial institutions with considerable financial assets on their balance sheet, this might have a significant impact.

Impairment

IFRS 9 contains requirements for an impairment model which will result in earlier recognition of credit losses. The standard requires to build an expected loss model for the impairment of the assets. The requirements on impairment provide institutions with more useful information in their financial statements about their expected credit losses on financial instruments. With this information institutions can notice financial risks earlier.

Hedge accounting

The general hedge accounting requirements added to IFRS 9 reflect the IASB’s goal to simplify hedge accounting. The standard aligns also hedge accounting more closely with the risk management activities undertaken by institutions and provides decision-useful information about an entity’s risk management strategies. The new hedge accounting model makes it possible for institutions to present their risk management activities better in their financial statements and is more principal-based than the previous IASB model. The changes on hedge accounting include the requirements for the

IFRS 9 provides an accounting policy choice: entities can either continue to apply the hedge accounting requirements of IAS 39, or they can apply IFRS 9. This is a choice banks and other financial institutions are having to take into consideration.

How can PwC help?

Our team has experience in helping financial institutions successfully complete the transition to new accounting standards. As well as helping you to get the numbers right and we can guide you through the operational challenges. Our flexible and scalable methodology focuses on effective knowledge transfer, in order for you to get lasting benefits. We can help you with your IFRS 9 transition through:

• Technical and accounting advice
• Trainings
• Hedge accounting applications
• Valuation of derivative instruments
• Valuation and impairment testing
• Impairment model design
• Impairment model validation
• Processes, data and systems design