**2. Uniform Accounting System**

Before 1994, there was no standard in accounting applications and in accounting principles in Turkey. As of 1.1.1994, there has been a transition to the standard Uniform Accounting System in accordance with the Accounting System Application General Communiqué, Order No.1 published in the Official Gazette dated 26.12.1992 and numbered 21,447 (repeated). With the regulation, it was aimed to provide uniformity in all accounting applications in Turkey and to have the same operating language for all segments. Accordingly, natural and legal persons holding books according to balance sheet basis are obliged to apply the accounting procedures and principles stated in the General Communiqué on Accounting System.

Tax regulations in Turkey may directly interfere with accounting practices and education in time. This relationship between tax regulations and accounting causes accounting in Turkey to be intended for tax and focused on tax regulations. Tax Procedure Law obligates application of the conditions required by the General Communique on Accounting System Application and Tax Procedure Law simultaneously. The arrangements made with the General Communique on Accounting System

**11**

*National Accounting Standards in Turkey DOI: http://dx.doi.org/10.5772/intechopen.84364*

uniform financial statements and reports.

and comparability characteristics of the audit.

Regulation [1]:

ing a decision.

segments.

• Basic concepts of accounting

• Explanation of accounting policies

• Principles of financial statements

• Arrangement and presentation of financial statements

Application do not regulate or modify any matter related to tax legislation. The difference between period income and taxable income shall not be settled on balance sheets or income statements; taxable profit shall be calculated outside of financial statements. Uniform Accounting System is defined as the use of the same chart of accounts in accounting applications, adopting the same accounting principles, benefiting from the same accounting concepts, and providing accounting information in

Uniform Accounting System is a system that includes financial statements, charts of accounts, account codes, and similar details. This regulation related to the transition to Uniform Accounting System was made in order to facilitate and provide a sound and reliable follow-up of the results of the undertakings and enterprises belonging to real and legal persons holding books on a balance sheet basis and to ensure that the information presented to the related parties through the financial statements reflects the real situation while maintaining the consistency

It is the responsibility of the business to be in compliance with the procedures and principles seen in changes made in the name of Uniform Accounting System and organization of reports and declarations for related legislation provisions.

• Full and direct delivery of accounting information to respective persons mak-

• To compare different periods of the same enterprise with different enterprises.

• Account names in the financial statements give the same meaning to all

• Retaining accounting term uniformity while remaining understandable.

Uniformity of the financial statements to be prepared within the framework of the procedures and principles related to the regulation and presentation of financial statements in Uniform Accounting System cannot be changed. In the determination of the taxable income, companies are required to make the necessary adjustments and calculations in accordance with tax legislation. The accounting principles and procedures of the Uniform Accounting System are explained in five sections as follows:

Uniform account framework, chart of accounts, and descriptions of accounts. Businesses must establish their accounting systems in accordance with the uniform accounting framework and the chart of accounts. The basic concepts of accounting in Turkey are the concept of social responsibility, the concept of business entity, the going-concern concept, the concept of periodicity, the concept of monetary unit, the concept of cost basis, the concept of objectivity and documentation, the

• Aims to establish trust between businesses and those concerned.

## *National Accounting Standards in Turkey DOI: http://dx.doi.org/10.5772/intechopen.84364*

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

Accounts came into force in Turkey in 1994 and still continue today.

apply Uniform Accounting System.

**2. Uniform Accounting System**

appropriate, understandable, objective, and comparable; to prevent misappropriation of the individuals and institutions related to enterprises; to prevent wrong decisions; and to create a common language during the production and presentation of financial information, Uniform Accounting System and Uniform Chart of

As with financial reports prepared in accordance with the different legal and financial structures of countries, International Accounting Standards (IAS) were made compatible which resulted in an exact translation of the International Accounting Standards (IAS), and International Financial Reporting Standards (IFRS) were entered into force as Turkish Financial Reporting Standards (TFRS) in Turkey. Public Oversight, Accounting and Auditing Standards Authority (POAASA) is authorized for the creation, publishing, and monitoring of changes of the accounting standards that are in compliance with international standards. POAASA aims to ensure the transparency, reliability, comprehensibility, comparability, and consistency of the financial statements of the firms. Currently, there are various accounting practices in Turkey, and the preference of which one to be used depends on being subject to independent audit by the enterprises. Companies whose shares are traded on the stock exchange and that are subject to independent audit apply TFRS, while Large- and Medium-Sized Enterprises which are subject to independent audit but whose shares are not traded on the stock exchange and do not apply TFRS, apply Financial Reporting Standards for Large- and Medium-Sized Enterprises (FRS for LMEs). Enterprises that are not subject to independent audit

Uniform Chart of Accounts is used by all businesses. Despite the application of new accounting standards in Turkey, there are no new regulations regarding the needs of Uniform Chart of Accounts, which are used by the companies that perform accounting and reporting in accordance with these new standards. In Uniform Chart of Accounts, there is a need for a revision of the needs of enterprises.

Banks and insurance companies: private financial institutions: financial leasing, factoring, and financing companies: security mutual funds, brokerage houses, and investment trusts are subject to Banking Regulation and Supervision Agency (BRSA) legislation and have a different chart of accounts, and a revision has been performed for this chart of accounts. The mentioned company activities are

Before 1994, there was no standard in accounting applications and in accounting principles in Turkey. As of 1.1.1994, there has been a transition to the standard Uniform Accounting System in accordance with the Accounting System Application

General Communiqué, Order No.1 published in the Official Gazette dated 26.12.1992 and numbered 21,447 (repeated). With the regulation, it was aimed to provide uniformity in all accounting applications in Turkey and to have the same operating language for all segments. Accordingly, natural and legal persons holding books according to balance sheet basis are obliged to apply the accounting procedures and principles stated in the General Communiqué on Accounting System. Tax regulations in Turkey may directly interfere with accounting practices and education in time. This relationship between tax regulations and accounting causes accounting in Turkey to be intended for tax and focused on tax regulations. Tax Procedure Law obligates application of the conditions required by the General Communique on Accounting System Application and Tax Procedure Law simultaneously. The arrangements made with the General Communique on Accounting System

accounted in accordance with the declarations of BRSA and TFRS.

**10**

Application do not regulate or modify any matter related to tax legislation. The difference between period income and taxable income shall not be settled on balance sheets or income statements; taxable profit shall be calculated outside of financial statements.

Uniform Accounting System is defined as the use of the same chart of accounts in accounting applications, adopting the same accounting principles, benefiting from the same accounting concepts, and providing accounting information in uniform financial statements and reports.

Uniform Accounting System is a system that includes financial statements, charts of accounts, account codes, and similar details. This regulation related to the transition to Uniform Accounting System was made in order to facilitate and provide a sound and reliable follow-up of the results of the undertakings and enterprises belonging to real and legal persons holding books on a balance sheet basis and to ensure that the information presented to the related parties through the financial statements reflects the real situation while maintaining the consistency and comparability characteristics of the audit.

It is the responsibility of the business to be in compliance with the procedures and principles seen in changes made in the name of Uniform Accounting System and organization of reports and declarations for related legislation provisions. Regulation [1]:


Uniformity of the financial statements to be prepared within the framework of the procedures and principles related to the regulation and presentation of financial statements in Uniform Accounting System cannot be changed. In the determination of the taxable income, companies are required to make the necessary adjustments and calculations in accordance with tax legislation. The accounting principles and procedures of the Uniform Accounting System are explained in five sections as follows:


Uniform account framework, chart of accounts, and descriptions of accounts. Businesses must establish their accounting systems in accordance with the uniform accounting framework and the chart of accounts. The basic concepts of accounting in Turkey are the concept of social responsibility, the concept of business entity, the going-concern concept, the concept of periodicity, the concept of monetary unit, the concept of cost basis, the concept of objectivity and documentation, the

consistency concept, the full disclosure concept, the concept of prudence, the concept of materiality, and the concept of substance over form.

In the Uniform Accounting System, it is not required to disclose them if they are prepared on the basis of the concepts of going-concern, consistency, and periodicity in the preparation of financial statements. However, in the case of deviation from these concepts, the disclosures of the financial statements should explain this deviation together with their reasons. All significant accounting policies included in the financial statements should be clarified and explained briefly. Financial statements should be comparable in terms of periods. If a change is made in the current period or will occur in future periods, which has a significant effect on financial policies, it should be explained together with the reasons and the effects of these changes on financial statements. The financial statements consist of the following ones [1]:


Providing useful information in making decisions for investors, lenders, and other interested parties; providing useful information on assessing future cash flows; providing information about assets, resources and changes in these items; and obtaining information about the business activities, these statements should be understandable, appropriate, reliable, comparable, and promptly arranged so that the information in the financial statements can be used in the best possible way by decision-makers.

Uniform Accounting System includes real and legal persons holding books according to the balance sheet basis. However, there are institutions that need to use different accounting techniques in terms of their activities. These include bank and insurance companies; private financial institutions; financial leasing, factoring, and financing companies; security investment funds; brokerage houses; and investment trusts. These institutions are subject to BRSA's legislation, and they are required to comply with the basic principles of accounting, explanation of accounting policies, and principles of financial statements in Uniform Accounting System. They have a different chart of accounts and do not have to fulfill other obligations.

Banks are required to account for their activities in accordance with the communiqués published by BRSA and within the framework of the conceptual provisions of POAASA. However, the accounting for subsidiaries, jointly controlled entities and associates and consolidated financial statements, financial statements to be disclosed to public, and procedures and principles regarding the disclosure and footnotes are determined by the communiqués issued by BRSA.

In accordance with Banking Law, banks are obliged to implement a uniform order in accounting systems in accordance with the procedures and principles determined by BRSA by taking the opinion of the POAASA. Banks must be able to account for all transactions in accordance with their real nature in accordance with the accounting and Financial Reporting Standards issued by POAASA in a manner

**13**

*National Accounting Standards in Turkey DOI: http://dx.doi.org/10.5772/intechopen.84364*

**2.1 Uniform Chart of Accounts**

always recorded in the same accounts.

Account Chart framework [1] is as follows:

1. Current assets

2. Noncurrent assets

3. Short-term liabilities

4. Long-term liabilities

6. Income statement accounts

7. Cost accounting accounts

9. Off-balance sheet accounts

5. Equity

8. Free

that is capable of meeting the need to obtain financial reports in an understandable, reliable, and comparable style, suitable for auditing, analysis, and interpretation. Banks are required to achieve transparency and uniformity in accounting and reporting systems, by preventing transactions from being left out of record and by accounting for all activities in a timely, healthy, and secure manner within the framework of correct and timely preparation, reporting, and publishing of finan-

The "Declaration in Reference to the Uniform Chart of Accounts and Prospectus" published in 26.01.2007 and 26,415 (repeated) numbered Official Gazette based on the regulation of procedures and principles for the accounting of bank's accounting practices and documents provides uniformity in terms of accounting and financial reporting for banks and direct acquisition of a single type of balance sheet and income statement, obtaining direct and healthy information in a verifiable and auditable manner in order to ensure supervision and monitoring and to provide the information needed for various analyses and interpretations in a standardized way.

The chart of accounts is expressed as a list of accounts to be used in accounting. Uniform Chart of Accounts is a system that is organized for the systematic execution of all accounts held in an enterprise and to ensure that the same events are

In Turkey, Uniform Chart of Accounts mentioned in the Accounting System Application General Communiqué, Order No.1 published in the Official Gazette dated 26.12.1992 and numbered 21,447 (repeated) became a necessity for all businesses and accounting activities as of 01.01.1994. Thus, it is aimed to provide unity in accounting practices in enterprises. Uniform Chart of Accounts is a scale that shows the accounts of the activities of the enterprises, and the enterprises comply with the chart of accounts and transfer the same type of documents to the accounting records and financial statements according to the same chart of accounts and the same accounting system. The purpose of the Uniform Chart of Accounts is to use the same chart of accounts for companies holding books on the balance sheet basis and to include the economic events occurring in enterprises in the same accounts within the framework of the same systems and principles. Uniform

cial statements showcasing financial performance and management.

## *National Accounting Standards in Turkey DOI: http://dx.doi.org/10.5772/intechopen.84364*

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

consistency concept, the full disclosure concept, the concept of prudence, the

In the Uniform Accounting System, it is not required to disclose them if they are prepared on the basis of the concepts of going-concern, consistency, and periodicity in the preparation of financial statements. However, in the case of deviation from these concepts, the disclosures of the financial statements should explain this deviation together with their reasons. All significant accounting policies included in the financial statements should be clarified and explained briefly. Financial statements should be comparable in terms of periods. If a change is made in the current period or will occur in future periods, which has a significant effect on financial policies, it should be explained together with the reasons and the effects of these changes on financial statements. The financial statements consist of the following ones [1]:

Providing useful information in making decisions for investors, lenders, and other interested parties; providing useful information on assessing future cash flows; providing information about assets, resources and changes in these items; and obtaining information about the business activities, these statements should be understandable, appropriate, reliable, comparable, and promptly arranged so that the information in the financial statements can be used in the best possible way by decision-makers. Uniform Accounting System includes real and legal persons holding books according to the balance sheet basis. However, there are institutions that need to use different accounting techniques in terms of their activities. These include bank and insurance companies; private financial institutions; financial leasing, factoring, and financing companies; security investment funds; brokerage houses; and investment trusts. These institutions are subject to BRSA's legislation, and they are required to comply with the basic principles of accounting, explanation of accounting policies, and principles of financial statements in Uniform Accounting System. They have a

Banks are required to account for their activities in accordance with the communiqués published by BRSA and within the framework of the conceptual provisions of POAASA. However, the accounting for subsidiaries, jointly controlled entities and associates and consolidated financial statements, financial statements to be disclosed to public, and procedures and principles regarding the disclosure and

In accordance with Banking Law, banks are obliged to implement a uniform order in accounting systems in accordance with the procedures and principles determined by BRSA by taking the opinion of the POAASA. Banks must be able to account for all transactions in accordance with their real nature in accordance with the accounting and Financial Reporting Standards issued by POAASA in a manner

different chart of accounts and do not have to fulfill other obligations.

footnotes are determined by the communiqués issued by BRSA.

concept of materiality, and the concept of substance over form.

• Balance sheet

• Income statement

• Statement of cost of sales

• Statement of profit distribution

• Statement of changes in equity

• Fund flow statement

• Cash flow statement

**12**

that is capable of meeting the need to obtain financial reports in an understandable, reliable, and comparable style, suitable for auditing, analysis, and interpretation. Banks are required to achieve transparency and uniformity in accounting and reporting systems, by preventing transactions from being left out of record and by accounting for all activities in a timely, healthy, and secure manner within the framework of correct and timely preparation, reporting, and publishing of financial statements showcasing financial performance and management.

The "Declaration in Reference to the Uniform Chart of Accounts and Prospectus" published in 26.01.2007 and 26,415 (repeated) numbered Official Gazette based on the regulation of procedures and principles for the accounting of bank's accounting practices and documents provides uniformity in terms of accounting and financial reporting for banks and direct acquisition of a single type of balance sheet and income statement, obtaining direct and healthy information in a verifiable and auditable manner in order to ensure supervision and monitoring and to provide the information needed for various analyses and interpretations in a standardized way.
