Basis of preparation and summary of significant accounting policies (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of Estimated Useful Lives for the Current and Comparative

The estimated useful lives are as follows:


Buildings			21 – 25 years
Mobile network infrastructure			4 – 20 years
Fixed network infrastructure			3 – 25 years
Call center equipment			4 – 8 years
Equipment, fixtures and fittings			2 – 10 years
Motor vehicles			4 – 6 years
Central betting terminals			5 – 10 years
Leasehold improvements			3 – 5 years

Disclosure of Useful Lives for the Intangible Assets

The Group amortizes intangible assets with a limited useful life using the straight-line method over the following periods:


Transmission line software			5 –10 years
Central betting system operating right			7 – 10 years
Customer base			2 – 15 years
Brand name			9 – 10 years
Indefeasible right of use			15 years

Disclosure of Estimated Useful Lives for Investment Properties

The estimated useful lives are as follows:


Investment Property			25 -45 years

Summary of Impacts of Adoption of IFRS 9, IFRS 15 and IFRS 16 on Consolidated Financial Statements

The following tables show the adjustments recognised for each individual line item. Line items that were not affected by the changes have not been included. As a result, the sub-totals and totals disclosed cannot be recalculated from the numbers provided. The adjustments are explained in more detail by standard below.


		31 December 2018 As reported			Effect Of Change Due to IFRS 9			Effect Of Change Due to IFRS 15			Effect Of Change Due to IFRS 16			31 December 2018 without Adoptions
Assets
	Property, plant and equipment		11,116,316			—			—			—			11,116,316
	Right-of-use assets		1,649,602			—			—			1,649,602			—
	Intangible assets		10,050,172			—			1,059,866			—			8,990,306
	Investment properties		15,425			—			—			—			15425
	Trade receivables		115,001			(608	)		(3,513	)		—			119,122
	Contract assets		3,513			—			3,513			—			—
	Receivables from financial services		884,686			—			—			—			884,686
	Deferred tax assets		152,732			—			—			14,696			138,036
	Investments in equity accounted investees		19,413			—			—			—			19,413
	Other non-current assets		421,306			(228	)		(10,849	)		(161,426	)		593,809

Total non-current assets			24,428,166			(836	)		1,049,017			1,502,872			21,877,113

	Inventories		180,434			—			—			—			180,434
	Trade receivables		2,505,990			49,567			(703,742	)		6,926			3,153,239
	Due from related parties		13,533			67			—			—			13,466
	Receivables from financial services		3,286,243			(40,463	)		—			—			3,326,706
	Derivative financial instruments		1,356,062			—			—			—			1,356,062
	Held to maturity investments		—			(51,863	)		—			—			51,863
	Financial asset at fair value through profit or loss		9,409			9,409			—			—			—
	Financial asset at fair value through other comprehensive income		42,454			42,454			—			—			—
	Contract assets		711,928			—			711,928			—			—
	Cash and cash equivalents		7,419,239			(2,364	)		—			—			7,421,603
	Other current assets		1,091,512			87			(137,997	)		(312,872	)		1,542,294

Subtotal			16,616,804			6,894			(129,811	)		(305,946	)		17,045,667

Assets classified as held for sale			1,720,305			—			—			—			1,720,305

Total current assets			18,337,109			6,894			(129,811	)		(305,946	)		18,765,972

Total assets			42,765,275			6,058			919,206			1,196,926			40,643,085

Equity
	Share capital		2,200,000			—			—			—			2,200,000
	Share premium		269			—			—			—			269
	Treasury shares (-)		(141,534	)		—			—			—			(141,534	)
	Additional paid in capital		35,026			—			—			—			35,026
	Reserves		2,503,537			(154	)		8,958			(740	)		2,495,473
	Remeasurements of employee termination benefit		(34,871	)		—			—			—			(34,871	)
	Retained earnings		11,359,317			4,989			667,946			(71,464	)		10,757,846

Total equity attributable to equity holders of Turkcell Iletisim Hizmetleri AS (“the Company”)			15,921,744			4,835			676,904			(72,204	)		15,312,209

Non-controlling interests			131,810			—			—			—			131,810

Total equity			16,053,554			4,835			676,904			(72,204	)		15,444,019


		31 December 2018 As reported		Effect Of Change Due to IFRS 9		Effect Of Change Due to IFRS 15			Effect Of Change Due to IFRS 16		31 December 2018 without Adoptions
Liabilities
	Borrowings		13,119,636		—		—			902,285		12,217,351
	Employee benefit obligations		224,747		—		—			—		224,747
	Provisions		268,722		—		—			—		268,722
	Deferred tax liabilities		862,360		1,223		193,854			—		667,283
	Contract liabilities		131,598		—		131,598			—		—
	Other non-current liabilities		364,610		—		(102,887	)		—		467,497

Total non-current liabilities			14,971,673		1,223		222,565			902,285		13,845,600

	Borrowings		7,035,909		—		—			366,845		6,669,064
	Current tax liabilities		133,597		—		—			—		133,597
	Trade and other payables		3,788,174		—		1,786			—		3,786,388
	Due to related parties		45,331		—		17,951			—		27,380
	Contract liabilities		255,756		—		255,756			—		—
	Deferred revenue		8,948		—		(255,756	)		—		264,704
	Provisions		307,068		—		—			—		307,068
	Derivative financial instruments		165,265		—		—			—		165,265

Total current liabilities			11,740,048		—		19,737			366,845		11,353,466

Total liabilities			26,711,721		1,223		242,302			1,269,130		25,199,066


Total equity and liabilities			42,765,275		6,058		919,206			1,196,926		40,643,085


	31 December 2018 As reported			Effect Of Change Due to IFRS 9			Effect Of Change Due to IFRS 15			Effect Of Change Due to IFRS 16			31 December 2018 without Adoptions
Revenue		20,350,557			—			(18,132	)		—			20,368,689
Revenue from financial services		941,918			—			308			—			941,610

Total revenue		21,292,475			—			(17,824	)		—			21,310,299

Cost of revenue		(13,785,448	)		—			(329,447	)		51,098			(13,507,099	)
Cost of revenue from financial services		(360,545	)		—			—			—			(360,545	)

Total cost of revenue		(14,145,993	)		—			(329,447	)		51,098			(13,867,644	)

Gross profit		6,565,109			—			(347,579	)		51,098			6,861,590
Gross profit from financial services		581,373			—			308			—			581,065

Total gross profit		7,146,482			—			(347,271	)		51,098			7,442,655

Other income		241,435			—			—			35,012			206,423
Selling and marketing expenses		(1,626,714	)		141,527			523,210			51,208			(2,342,659	)
Administrative expenses		(673,370	)		225,778			—			50,724			(949,872	)
Net impairment losses on financial and contract assets		(346,390	)		(346,390	)		—			—			—
Other expenses		(381,582	)		—			—			(44,431	)		(337,151	)

Operating profit		4,359,861			20,915			175,939			143,611			4,019,396

Finance income		1,932,133			—			—			892			1,931,241
Finance costs		(3,619,091	)		(14	)		—			(230,663	)		(3,388,414	)

Net finance costs		(1,686,958	)		(14	)		—			(229,771	)		(1,457,173	)

Share of profit of equity accounted investees		(87	)		—			—			—			(87	)

Profit before income tax		2,672,816			20,901			175,939			(86,160	)		2,562,136

Income tax expense		(495,481	)		(4,764	)		(38,015	)		14,696			(467,398	)

Profit for the period		2,177,335			16,137			137,924			(71,464	)		2,094,738

Profit for the year is attributable to:
Owners of the Company		2,021,065			16,137			137,924			(71,464	)		1,938,468
Non-controlling interests (*)		156,270			—			—			—			156,270

Total		2,177,335			16,137			137,924			(71,464	)		2,094,738

Basic and diluted earnings per share for profit attributable to owners of the Company (in full TL)		0.93			0.01			0.06			(0.03	)		0.89

Summary of Impact on Retained Earnings

The total impact on the Group’s retained earnings as at 1 January 2018 is as follows:


	1 January 2018
Retained Earnings Opening – 31 December 2017		11,312,276
Increase in provision for receivables from financial services		(52,951	)
Decrease in provision for other financial assets		38,384
Deferred tax effect		3,419

Total impact of adoption in accordance with IFRS 9		(11,148	)

Retained Earnings Opening – 1 January 2018 (Including IFRS 9- excluding IFRS 15)		11,301,128

Summary of Reclassification of Financial Instruments on the Date of Initial Application

On the date of initial application, 1 January 2018, the financial instruments of the Company were as follows, with any reclassifications noted;


Non-current financial assets	Original (IAS 39)		New (IFRS 9)		Original		New		Difference
Trade receivables		Amortized cost		Amortized cost		155,634		154,392		(1,242	)
Receivables from financial services		Amortized cost		Amortized cost		1,297,597		1,297,597		—
Held to maturity investments		Held to maturity		Amortized cost		654		654		—
Current financial assets
Trade receivables		Amortized cost		Amortized cost		2,848,572		2,888,862		40,290
Due from related parties		Amortized cost		Amortized cost		5,299		5,522		223
Receivables from financial services		Amortized cost		Amortized cost		2,950,523		2,897,572		(52,951	)
Derivatives		FVPL		FVPL		981,396		981,396		—
Cash and cash equivalents		Amortized cost		Amortized cost		4,712,333		4,711,452		(881	)
Held to maturity investments		Held to maturity		Amortized cost		11,338		11,332		(6	)
Current financial liabilities
Derivatives		FVPL		FVPL		110,108		110,108		—

Summary of Reconciliation of Impairment Provision for Financial Services Receivables

The reconciliation of impairment provision and opening balances for financial services receivables as of 1 January 2018 is stated as below:


	1 January 2018
At 1 January 2018 (calculated under IAS 39)		72,992
Amounts restated through opening retained earnings		52,951
At 1 January 2018 (calculated under IFRS 9)		125,943
Current year provision at profit or loss statement – IFRS 9		190,509
Current year provision at profit or loss statement if IAS 39 was applied		202,998

Summary of Reconciliation of Impairment Provision for Other Financial Assets

The reconciliation of impairment provision and opening balances for other financial assets as of 1 January 2018 is stated as below:


	1 January 2018
At 1 January 2018 (calculated under IAS 39)		705,440
Amounts restated through opening retained earnings		(38,384	)
At 1 January 2018 (calculated under IFRS 9)		667,056
Current year provision at profit or loss statement-IFRS 9		418,799
Current year provision at profit or loss statement if IAS 39 was applied		427,211

Summary of Impact of Adoption of IFRS 15 Revenue from Contract with Customers

The impact of adoption of IFRS 15, “Revenue from contracts with customers” on retained earnings as of 1 January 2018 is stated as below:


	1 January 2018
Retained earnings 1 January 2018 - (including IFRS 9 effects-excluding IFRS 15 effects)		11,301,128
Recognition of asset for subscriber acquisition cost		830,011
Decrease in current assets and non-current assets		(132,920	)
Deferred tax effect		(144,632	)
Other		(22,437	)
Adjustment to retained earnings from adoption of IFRS 15		530,022

Opening retained earnings 1 January 2018 - (including IFRS 9 and IFRS 15 effects)		11,831,150

GSM and other telecommunication operating licenses [member]

Statement [LineItems]

Disclosure of Useful Lives for the Intangible Assets

The useful lives for telecommunication licenses are as follows:


Telecommunications licenses			3 – 25 years

Computer software [member]

Statement [LineItems]

Disclosure of Useful Lives for the Intangible Assets

Amortization is recognized in the statement of profit or loss on a straight-line basis over the estimated useful lives. The useful lives for computer software are as follows:


Computer software			3 –8 years