Extension Of Obligations Regarding Simultaneously Undisclosed Financial Reports
A. INTRODUCTION
In the announcement made in accordance with the decision numbered 6/137 published in the Capital Markets Board of Türkiye (“CMB”) bulletin dated January 25, 2024 and numbered 2024/6 (“CMB Announcement”), the subsidiary due to the additional periods granted for the transition to inflation accounting within the scope of Turkish Accounting Standard 29 Financial Reporting in Hyperinflationary Economies (“TAS 29”), The rules and additional notification obligations to be applied in the event that issuers or capital market institutions in the nature of joint ventures or subsidiaries fail to disclose their financial reports at the same time or earlier than the parent, joint ventures or investor companies (including non-resident enterprises) were regulated.
In accordance with the additional announcement published in the CMB’s bulletin dated January 23, 2025 and numbered 2025/4 (“Additional Announcement”), the obligations to be applied in case of failure to disclose financial reports at the same time or earlier have been rearranged so as not to be limited to the periods for which additional time is granted. In this context, it has been decided that the obligations specified in the CMB Announcement will be valid until the end of the inflation accounting application, including the period 31.12.2024.
B. SIGNIFICANT REGULATIONS IN THE CMB ANNOUNCEMENT
With the decision numbered 81/1820 published in the CMB’s bulletin dated December 28, 2023 and numbered 2023/81 (“TAS 29 Decision”), it has been decided to add 10 weeks to the notification periods of the financial reports for the accounting period 31.12.2023 for which TAS 29 will be applied for the first time, and 6 weeks to the notification periods of the first two interim financial reports to be prepared following the first annual financial reports of those with special accounting periods dated 31.03.2024 and 30.06.2024 for which inflation accounting will be applied.
Afterwards, limited to the financial reporting periods for which additional time is given in the CMB Announcement and TAS 29 Decision, if the issuer or capital market institution that is a subsidiary, joint venture or associate fails to disclose its financial reports at the same time as or before its parent, joint venture or investor company (including entities resident abroad)
(i) To specify whether the information in question is subject to inflation adjustment, whether it has been audited, whether any differences are expected compared to the full set of financial reports to be publicly disclosed later, and where and how the financial reports of the parent company, joint venture partner, or investor company can be accessed, ensuring that the disclosure is made simultaneously with the publication of the consolidated financial statements of the parent company, joint venture partner, or investor company. The disclosed information should include all material information that could directly affect investors' investment decisions regarding the business and should either be included in the consolidated financial statements and footnotes or additionally presented to investors.
(ii) A statement of responsibility regarding the disclosed information must also be included, signed by the board member responsible for financial reporting and the general manager or financial reporting officer of the issuer or capital market institution making the disclosure.
Accordingly, it has been decided that the consolidated issuer or capital market institution shall make a public disclosure.
C. SIGNIFICANT REGULATIONS IN THE ADDITIONAL ANNOUNCEMENT
According to the Additional Announcement, regarding the rules to be applied and additional notification obligations in case issuers or capital market institutions that are subsidiaries, joint ventures or associates are unable to disclose their financial reports at the same time or earlier than their parent, joint venture or investor company due to the application of inflation accounting, the limitation of financial reporting periods given in the TAS 29 Decision has been removed and it has been decided to apply for all annual and interim financial reporting periods until the CMB decides to terminate the application of inflation accounting, including the financial statement period 31.12.2024 and will be applied for all annual and interim financial statement periods until the CMB decides to terminate the application of inflation accounting.
D. CONCLUSION
The CMB has decided that the CMB Announcement, which regulates the procedures to be taken by issuers or capital market institutions that are subsidiaries, joint ventures, or associates in the event that, due to the application of inflation accounting, they are unable to disclose their financial reports at the same time or earlier than their parent, joint venture, or investor company, shall be applied for all annual and interim financial reporting periods until the CMB decides to terminate the application of inflation accounting.
For further information and support, please contact us at info@lbfpartners.com.
LBF Partners Law Firm
In the announcement made in accordance with the decision numbered 6/137 published in the Capital Markets Board of Türkiye (“CMB”) bulletin dated January 25, 2024 and numbered 2024/6 (“CMB Announcement”), the subsidiary due to the additional periods granted for the transition to inflation accounting within the scope of Turkish Accounting Standard 29 Financial Reporting in Hyperinflationary Economies (“TAS 29”), The rules and additional notification obligations to be applied in the event that issuers or capital market institutions in the nature of joint ventures or subsidiaries fail to disclose their financial reports at the same time or earlier than the parent, joint ventures or investor companies (including non-resident enterprises) were regulated.
In accordance with the additional announcement published in the CMB’s bulletin dated January 23, 2025 and numbered 2025/4 (“Additional Announcement”), the obligations to be applied in case of failure to disclose financial reports at the same time or earlier have been rearranged so as not to be limited to the periods for which additional time is granted. In this context, it has been decided that the obligations specified in the CMB Announcement will be valid until the end of the inflation accounting application, including the period 31.12.2024.
B. SIGNIFICANT REGULATIONS IN THE CMB ANNOUNCEMENT
With the decision numbered 81/1820 published in the CMB’s bulletin dated December 28, 2023 and numbered 2023/81 (“TAS 29 Decision”), it has been decided to add 10 weeks to the notification periods of the financial reports for the accounting period 31.12.2023 for which TAS 29 will be applied for the first time, and 6 weeks to the notification periods of the first two interim financial reports to be prepared following the first annual financial reports of those with special accounting periods dated 31.03.2024 and 30.06.2024 for which inflation accounting will be applied.
Afterwards, limited to the financial reporting periods for which additional time is given in the CMB Announcement and TAS 29 Decision, if the issuer or capital market institution that is a subsidiary, joint venture or associate fails to disclose its financial reports at the same time as or before its parent, joint venture or investor company (including entities resident abroad)
(i) To specify whether the information in question is subject to inflation adjustment, whether it has been audited, whether any differences are expected compared to the full set of financial reports to be publicly disclosed later, and where and how the financial reports of the parent company, joint venture partner, or investor company can be accessed, ensuring that the disclosure is made simultaneously with the publication of the consolidated financial statements of the parent company, joint venture partner, or investor company. The disclosed information should include all material information that could directly affect investors' investment decisions regarding the business and should either be included in the consolidated financial statements and footnotes or additionally presented to investors.
(ii) A statement of responsibility regarding the disclosed information must also be included, signed by the board member responsible for financial reporting and the general manager or financial reporting officer of the issuer or capital market institution making the disclosure.
Accordingly, it has been decided that the consolidated issuer or capital market institution shall make a public disclosure.
C. SIGNIFICANT REGULATIONS IN THE ADDITIONAL ANNOUNCEMENT
According to the Additional Announcement, regarding the rules to be applied and additional notification obligations in case issuers or capital market institutions that are subsidiaries, joint ventures or associates are unable to disclose their financial reports at the same time or earlier than their parent, joint venture or investor company due to the application of inflation accounting, the limitation of financial reporting periods given in the TAS 29 Decision has been removed and it has been decided to apply for all annual and interim financial reporting periods until the CMB decides to terminate the application of inflation accounting, including the financial statement period 31.12.2024 and will be applied for all annual and interim financial statement periods until the CMB decides to terminate the application of inflation accounting.
D. CONCLUSION
The CMB has decided that the CMB Announcement, which regulates the procedures to be taken by issuers or capital market institutions that are subsidiaries, joint ventures, or associates in the event that, due to the application of inflation accounting, they are unable to disclose their financial reports at the same time or earlier than their parent, joint venture, or investor company, shall be applied for all annual and interim financial reporting periods until the CMB decides to terminate the application of inflation accounting.
For further information and support, please contact us at info@lbfpartners.com.
LBF Partners Law Firm
e.copur@lbfpartners.com
