Reporting financial statements of a Turkish business according to your own standards

The Turkish bookkeeping and reporting practice is heavily reliant on form over substance basis, which is a deviation from the modern reporting standards which promote substance over form principles. Another reason for deviation is that the matching principle of accounting is also somewhat distorted in practice. Most accountants prepare financial statements for purposes of tax compliance, and usually neglect that side of financial statements where the reports should convey useful and timely information to users. The tax administration authorities are also not very accustomed to accounting records for accruals and provisions as it makes their jobs difficult by introducing deviation between taxable income and accounting income.

Due to these reasons, it is necessary to heavily rely on “adjustment entries” to convert financial statement in local form to a more recognisable IFRS, US GAAP or German GAAP format that involve, among other things, all kinds of accruals, provisions and conditions for recognition of assets and liabilities. Most Turkish companies that convert their financial statements do so out of the accounting software, and mostly in MS Excel.

If you represent a multinational company with a Turkish subsidiary whose financial statements you need to consolidate at home, then you will benefit from making use of our services in bookkeeping and reporting.