- See All
- Infrastructure & Project Finance
- Mergers & Acquisitions
- Banking & Finance
- Real Estate
- Energy & Natural Resources
- Global Trade & Customs
- Intellectual Property
- Employment & Labor
- Wealth Management
- Capital Markets
- Competition & Anti-Trust
- Data Protection
- Corporate Support
- White Collar Crime & Investigations
- Dispute Resolution
Developments Regarding Inflation Accounting
The General Communiqué on Tax Procedure Law (Serial No: 555) (“Communiqué”) regarding inflation adjustment was published in the Official Gazette dated 30 December 2023 and numbered 32415 (Second Recurrent).
Inflation accounting is the process of determining the purchasing power of money in a given period compared to the purchasing power in a different period. This practice calculates the increase in the general price level over a specified period and is used as an economic indicator.
The Communiqué requires that income and corporate taxpayers who determine their earnings on the basis of balance sheets make inflation adjustments in accordance with the Tax Procedure Law.
The Banking Regulation and Supervision Agency (“BRSA”), the Capital Markets Board (“CMB”), and the Insurance and Private Pension Regulation and Supervision Agency (“IPRSA”) have granted certain exemptions to the entities they regulate regarding the transition to inflation accounting.
Pursuant to the BRSA Decision No. 10825 dated 11 January 2024, the implementation date of the Communiqué for banks, financial leasing, factoring, financing, savings financing, and asset management companies was postponed to 1 January 2025.
Within the scope of the Announcement Pursuant to the Decision of the CMB dated 28 December 2023 and numbered 81/1820, the CMB made a public announcement regarding the implementation of inflation accounting by issuers and capital market institutions subject to the previous financial reporting regulations, starting with the annual financial reports of the accounting periods ending as of 31 December 2023, and granting an additional period of 10 weeks for the public disclosure of annual financial reports and 6 weeks for the public disclosure of the first two interim financial reports.
Within the scope of the Announcement Pursuant to the Decision of the CMB dated 25 January 2024 and numbered 6/137, the CMB announced the actions to be taken in the event that the issuer or capital markets institution, which is a subsidiary, joint venture, or affiliate, fails to disclose its financial reports at the same time or earlier than its parent company, joint venture, or investor company (including entities located abroad), limited to the financial reporting periods for which additional time was granted by the Announcement Pursuant to the Decree of the CMB dated 28 December 2023 and numbered 81/1820.
In the Announcement Pursuant to the Decision of the CMB dated 8 February 2024 and numbered 9/221, it was announced that the financial statements and independent audit reports prepared in accordance with the special regulations of banks and asset management companies subject to the Banking Law No. 5411 (“Banking Law”), insurance companies subject to the Insurance Law No. 5684 dated 3 February 2007 and companies subject to the Financial Leasing, Factoring, Financing, and Savings Finance Companies Law No. 6361 dated 21 November 2012 would be considered as the basis in evaluating their application to the Board for approval of the prospectus or issuance document and in the preparation of financial statements and fulfillment of independent audit obligations.