**5. Conclusion**

*Accounting and Finance - New Perspectives on Banking, Financial Statements and Reporting*

while it was not included in TFRS for SMEs.

be prepared in the FRS for LMEs [10]:

• Statement of financial position

• Statement of changes in equity

• Fits financial information requirements

purposes to use financial data will be become a habit [11].

and provides comparability of financial statements [12].

The objectives of the FRS for LMEs are defined as follows:

• Providing the preparation of comparable financial statements

Since the FRS for LMEs has set a standard for the determination of commercial profit in Turkey and can be applied more easily than TFRS, it will contribute to a clearer understanding and proper implementation of the full set of standards. Thus, the main task of accounting, real activity result reporting, real situation detection, planning, and control will be available to produce information, and commercial

FRS for LMEs is an important development in terms of accounting practices in Turkey. It is a financial reporting standard that enables the financial statements of the enterprises that are subject to independent audit and are not obliged to be accountable to the public and do not prefer to apply TFRS, to be understood by investors and lenders with their fair presentation, needed for financial information,

FRS for LMEs prepared by POAASA has been prepared in a simpler language than TAS/TFRS, avoiding the details that are not necessary for large- and mediumsized enterprises and addressing the basic principles of related subjects only [13]. The primary objective of the Accounting System Application General

Communiqué issued based on the Tax Procedure Law is to show the financial position of the taxpayers against tax. FRS for LMEs is subject to independent audit and replaces the Accounting System Application General Communiqué and Supplementary Issues in entities not applying TFRS. The financial reporting framework that will be the basis for the preparation of the financial statements of the companies which are subject to independent audit and which will not be subject to TFRS in accordance with the Turkish Commercial Code; the base financial report must be FRS for LMEs.

In the POAASA's decision dated 13.09.2018 and numbered (03/161), FRS for LMEs are redefined. FRS for LMEs is a financial reporting framework that is subject to independent audit and is valid for financial statements presented to general assemblies of enterprises that do not apply the TFRS. It has been decided that may apply FRS for LMEs in the preparation of the individual and consolidated financial statements of the institutions, establishments, and enterprises other than those which are obliged to apply TFRS. However, it has been decided that such institu-

tions, organizations, and enterprises may apply TFRS on demand [4].

• Statement of Profit or loss

• Statement of cash flows

• Real

provisions, depreciation, severance pay, receivable and debt aging, inflation adjustment, and consolidation matters. It is essential that the fair value application and active registered fixed assets are valued. This issue has been added to FRS for LMEs

The purpose of FRS for LMEs is to provide financial statements that are in compliance with financial information needs. Four financial statements are required to

**18**

Accounting shows the financial structure of the enterprise and the results of its economic activities. Accounting practices constitute the source of accounting practices including basic accounting concepts, accounting principles, and accounting policies. Accounting standards is a set of rules that are formed in order to enable the comparison of the information generated in the accounting information system as a result of the business activities with confidence in accordance with the reality without considering the distinction of events of the same nature.

The subject of accounting is the financial statements and reports to be prepared for public disclosure. Therefore, the concept of public disclosure is in a sense also the purpose of generally accepted accounting standards. In order to meet the increasing need for trust in an environment of global competition, the rapid increase of standardization movements has also emerged in the accounting field.

Works aiming for standardization of both national and international dimensions of accounting are implemented in Turkey. Uniform Accounting System which has been in use in Turkey for a long period of time is a topic of discussion. However, as a result of this change, the Turkish translations of IAS/IFRS are in use as TAS/ TFRS. TAS and TFRS-applicable Financial Reporting Standards also continues to use the Uniform Accounting System which has been applied for a long time. In addition, the financial reporting standard has been enacted for large- and medium-sized enterprises. Despite the fact that Full Set TAS/TFRS is translated into Turkish, FRS for LMEs has been put into effect instead of IFRS for SMEs because it is a closer match. Companies that are subject to independent auditing and that do not apply TFRS are required to apply FRS for LMEs in the presentation of their consolidated financial statements.

International Accounting Standards have emerged as a result of the harmonization of financial reports prepared according to the standards determined by the legal or financial structures of different countries in order to enable users to compare the same criteria for information users in different countries. The consolidated financial statements of companies whose stock is traded in the stock exchange and that are subject to independent auditing must be prepared in accordance with TFRS.

Banks, insurance, reinsurance and pension companies, factoring companies, finance companies, financial leasing companies, and asset management companies are required to implement TFRS and have their own chart of accounts.

FRS for LMEs is applied by companies subject to independent audits but do not apply TFRS and provides comparable financial information. The purpose of FRS for LMEs is to provide financial statements that are in compliance with financial information needs. The companies that are not subject to independent audits are generally required to prepare their financial statements in accordance with Uniform Accounting System.

The application of the Accounting System Application General Communiqué and its annexed Uniform Chart of Accounts as prescribed by the Tax Procedure Law is still in progress. The combination of all these applications may cause confusion in some cases. In addition, it is necessary to review Uniform Chart of Accounts as soon as possible to define and reorganize the account codes that businesses need due to new applications.

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