The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date is:

(*)	Cash in hand is excluded from cash and cash equivalents.

(**)	Prepaid expenses, VAT receivable, receivable from the Ministry of Transport and Infrastructure of Turkiye and advances given are excluded from other current assets and other non-current assets.

35. Financial instruments (continued)

Credit risk (continued)

Credit quality:

The maximum exposure to credit risk for trade and subscriber receivables, other assets and cash and cash equivalent arising from sales transactions, including those classified as due from related parties at the reporting date by type of customer is:

Less

Less Than

Than 60

Than 90

Less Than

Other assets at

30 Days Past

Days Past

120 Days

150 Days

3 years Past

4 years

5 years

31 December 2022 (*)

Not Due

Due

Past Due

Due

Past Due

Total

Gross Carrying Amount

40,799,890

376,616

177,832

85,754

72,369

93,472

824,749

347,162

231,478

43,009,322

Loss Allowance

131,944

5,630

5,479

4,762

5,874

7,690

194,366

192,022

114,267

662,034

(*)	Other Assets includes trade receivables, subscriber receivables, derivative financial instruments, financial assets, other assets, cash and cash equivalent and due from related parties.

Less

Less Than

Than 60

Than 90

Less Than

Contract assets at

30 Days Past

Days Past

120 Days

150 Days

3 years Past

4 years

5 years

31 December 2022

Not Due

Due

Past Due

Due

Past Due

Total

Gross Carrying Amount

1,963,342

—

1,963,342

Loss Allowance

7,346

—

7,346

Less

Other assets from financial

Less Than

Than 60

Than 90

Less Than

services at 31 December 2022

30 Days Past

Days Past

120 Days

150 Days

3 years Past

4 years

5 years

(**)

Not Due

Due

Past Due

Due

Past Due

Total

Gross Carrying Amount

3,324,919

180,530

31,964

12,653

17,202

6,861

70,095

2,201

5,418

3,651,843

Loss Allowance

20,033

1,802

366

196

7,046

3,604

49,260

2,192

5,418

89,917

(**)	Other Assets includes trade receivables and subscriber receivables from financial services.

Less

Less Than

Than 60

Than 90

Less Than

Other assets at

30 Days Past

Days Past

120 Days

150 Days

3 years Past

4 years

5 years

31 December 2021 (*)

Not Due

Due

Past Due

Due

Past Due

Total

Gross Carrying Amount

42,352,851

538,256

204,767

93,423

63,909

71,096

1,227,728

549,970

257,258

45,359,258

Loss Allowance

126,791

14,697

10,203

9,101

8,250

10,135

410,493

345,167

112,626

1,047,463

(*)	Other Assets includes trade receivables, subscriber receivables, derivative financial instruments, financial assets, other assets, cash and cash equivalent and due from related parties.

Less

Less Than

Than 60

Than 90

Less Than

Contract assets at

30 Days Past

Days Past

120 Days

150 Days

3 years Past

4 years

5 years

31 December 2021

Not Due

Due

Past Due

Due

Past Due

Total

Gross Carrying Amount

2,059,911

—

2,059,911

Loss Allowance

10,252

—

10,252

35. Financial instruments (continued)

Credit risk (continued)

Credit quality: (continued)

Less

Less Than

Than 60

Than 90

Less Than

Other assets from financial services at

30 Days Past

Days Past

120 Days

150 Days

3 years Past

4 years

5 years

31 December 2021 (**)

Not Due

Due

Past Due

Due

Past Due

Total

Gross Carrying Amount

3,085,059

382,073

33,468

16,199

19,008

9,559

124,746

9,795

6,759

3,686,666

Loss Allowance

20,195

3,553

486

256

9,053

5,161

96,050

9,769

6,759

151,282

(**)	Other Assets includes trade receivables and subscriber receivables from financial services.

Impairment losses

Movements in the provision for impairment of trade receivables, contract assets, other assets and due from related parties are as follows:


	31 December 2022
	Contract Assets	Other Assets
Opening balance	10,252	1,047,463
Provision for impairment recognized during the year	1,289	610,599
Amounts collected	—	(232,462)
Receivables written off during the year as uncollectible	—	(397,132)
Effect of changes in exchange rates	—	47,430
Inflation adjustment	(4,195)	(413,864)
Closing balance	7,346	662,034


	31 December 2021
	Contract Assets	Other Assets
Opening balance	11,720	1,402,442
Provision for impairment recognized during the year	2,005	923,701
Amounts collected	—	(402,315)
Receivables written off during the year as uncollectible	—	(603,608)
Effect of changes in exchange rates	—	102,855
Inflation adjustment	(3,473)	(375,612)
Closing balance	10,252	1,047,463

35. Financial instruments (continued)

Movements in the provision for impairment of trade receivables, subscriber receivables, other assets and cash and cash equivalents from financial services are as follows:


	31 December	31 December
	2022	2021
Opening balance	151,282	345,476
Provision for impairment recognized during the year	103,094	133,977
Amounts collected	(68,647)	(112,522)
Receivables transferred with receivables transfer contract (*)	(36,985)	(146,945)
Inflation adjustment	(58,827)	(68,704)
Closing balance	89,917	151,282

(*)	Turkcell Finansman signed a transfer of claim agreement with a debt management company to transfer some of its doubtful receivables stemming from the years 2016 and 2021. Transferred doubtful receivables comprise of balances that Turkcell Finansman started legal proceedings for.

Liquidity risk

The table below analyses the Group’s financial liabilities by considering relevant maturity groupings based on their contractual maturities for:

all non-derivative financial liabilities, and

gross settled derivative financial instruments for which contractual maturities are essential for an understanding of the timing of the cash flows.

35. Financial instruments (continued)

Liquidity risk (continued)


	31 December 2022							31 December 2021
	Carrying	Contractual	6 months	6-12	1-2	2-5	More than 5	Carrying	Contractual	6 months	6-12	1-2	2-5	More than 5
	Amount	cash flows	or less	Months	years	years	Years	Amount	cash flows	or less	months	years	years	Years
Non-derivative financial liabilities
Secured bank loans	3,136,868	(3,626,031)	(616,130)	(242,972)	(475,576)	(1,318,013)	(973,340)	842,503	(870,511)	(201,900)	(200,342)	(239,586)	(228,683)	—
Unsecured bank loans	28,524,331	(31,220,977)	(8,875,434)	(4,898,822)	(4,516,080)	(11,238,409)	(1,692,232)	32,773,355	(35,541,826)	(8,492,162)	(3,039,099)	(5,631,753)	(15,915,368)	(2,463,444)
Debt securities issued	19,137,920	(23,654,946)	(1,714,260)	(519,867)	(1,039,733)	(10,876,254)	(9,504,832)	22,025,979	(28,712,826)	(804,279)	(632,233)	(1,264,465)	(14,111,647)	(11,900,202)
Lease liabilities	3,055,231	(5,186,425)	(772,668)	(583,181)	(918,574)	(1,458,421)	(1,453,581)	4,773,454	(7,545,432)	(1,138,393)	(935,169)	(1,191,070)	(2,092,223)	(2,188,577)
Trade and other payables (*)	6,932,734	(7,233,483)	(7,089,288)	—	—	—	(144,195)	7,582,037	(7,905,044)	(7,899,561)	(5,483)	—	—	—
Due to related parties	242,246	(334,850)	(334,850)	—	—	—	—	107,031	(143,398)	(143,398)	—	—	—	—
Consideration payable in relation to acquisition of BeST and Boyut Enerji (Note 27)	666,613	(1,879,158)	—	—	(9,328)	(108,758)	(1,761,072)	1,250,972	(2,200,500)	—	—	(10,949)	(120,426)	(2,069,125)
Derivative financial liabilities
Participating Cross Currency Swap and FX swap contracts	150,924	349,200	67,542	63,038	95,405	123,561	(346)	117,165	261,527	33,455	32,439	34,368	161,265	—
Buy	—	(11,117,506)	(10,419,790)	(940,582)	116,844	134,779	(8,757)	—	4,326,736	470,483	472,047	885,997	2,498,209	—
Sell	—	11,466,706	10,487,332	1,003,620	(21,439)	(11,218)	8,411	—	(4,065,209)	(437,028)	(439,608)	(851,629)	(2,336,944)	—
TOTAL	61,846,867	(72,786,670)	(19,335,088)	(6,181,804)	(6,863,886)	(24,876,294)	(15,529,598)	69,472,496	(82,658,010)	(18,646,238)	(4,779,887)	(8,303,455)	(32,307,082)	(18,621,348)

(*)	Advances received, license fee accruals, taxes and withholding taxes payable are excluded from trade and other payables.

35. Financial instruments (continued)

Foreign exchange risk

The Group’s exposure to foreign exchange risk at the end of the reporting period, based on notional amounts, was as follows:


	31 December 2022
	USD	EUR	RMB
Foreign currency denominated assets
Other non-current assets	69	11	—
Financial asset at fair value through other comprehensive income	167,157	115,995	—
Due from related parties - current	71	—	—
Trade receivables and contract assets	25,125	22,977	—
Other current assets	14,580	6,455	9,057
Cash and cash equivalents	393,932	557,380	194,430
	600,934	702,818	203,487
Foreign currency denominated liabilities
Loans and borrowings - non-current	(275,615)	(565,765)	(404,695)
Debt securities issued - non-current	(909,499)	—	—
Lease obligations - non-current	(1,210)	(12,474)	—
Other non-current liabilities	(35,476)	—	—
Loans and borrowings - current	(94,765)	(180,091)	(149,310)
Debt securities issued - current	(53,862)	—	—
Lease obligations - current	(3,076)	(3,060)	—
Other current liabilities	(886)	(5,156)	—
Trade and other payables - current	(109,401)	(17,514)	(369,627)
	(1,483,790)	(784,060)	(923,632)

Financial liabilities defined as hedging instruments	13,763	302,482	—
Exposure related to derivative instruments
Participating cross currency swap and FX swap contracts	376,307	(355,000)	282,453
Currency forward contracts	539,263	(150)	—
Net exposure	46,477	(133,910)	(437,692)

35. Financial instruments (continued)

Foreign exchange risk (continued)


	31 December 2021
	USD	EUR	RMB
Foreign currency denominated assets
Other non-current assets	188	11	—
Financial asset at fair value through other comprehensive income	85,029	16,453	—
Due from related parties - current	—	13	—
Trade receivables and contract assets	14,729	20,135	—
Other current assets	10,297	5,931	14,079
Cash and cash equivalents	814,899	141,110	71,600
	925,142	183,653	85,679
Foreign currency denominated liabilities
Loans and borrowings - non-current	(302,607)	(504,992)	(344,052)
Debt securities issued - non-current	(942,374)	—	—
Lease obligations - non-current	(3,460)	(16,829)	—
Other non-current liabilities	(56,888)	—	—
Loans and borrowings - current	(89,379)	(205,687)	(102,395)
Debt securities issued - current	(55,938)	—	—
Lease obligations - current	(2,589)	(3,274)	—
Other current liabilities	(953)	(8,752)	—
Trade and other payables - current	(96,236)	(17,010)	(363,670)
Due to related parties	—	(305)	—
	(1,550,424)	(756,849)	(810,117)

Financial liabilities defined as hedging instruments	16,987	261,680	—
Exposure related to derivative instruments
Participating cross currency swap and FX swap contracts	244,583	32,022	167,476
Currency forward contracts	517,242	—	—
Net exposure	153,530	(279,494)	(556,962)

35. Financial instruments (continued)

Exposure to currency risk

Sensitivity analysis

The basis for the sensitivity analysis to measure foreign exchange risk is an aggregate corporate-level currency exposure. The aggregate foreign exchange exposure is composed of all assets and liabilities denominated in foreign currencies, the analysis excludes net foreign currency investments.

A 10% strengthening/weakening of the TL, UAH, BYN, EUR against the following currencies as at 31 December 2022 and 31 December 2021 would have increased/(decreased) profit or loss before by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.


31 December 2022
	Profit/(Loss)		Equity
	Appreciation of	Depreciation of	Appreciation of	Depreciation of
Sensitivity analysis	foreign currency	foreign currency	foreign currency	foreign currency

1- USD net asset/liability	86,904	(86,904)	—	—
2- Hedged portion of USD risk (-)	—	—	(25,335)	25,335
3- USD net effect (1+2)	86,904	(86,904)	(25,335)	25,335

4- EUR net asset/liability	(266,948)	266,948	—	—
5- Hedged portion of EUR risk (-)	—	—	(25,720)	25,720
6- EUR net effect (4+5)	(266,948)	266,948	(25,720)	25,720

7- Other foreign currency net asset/liability (RMB)	(117,328)	117,328	—	—
8- Hedged portion of other foreign currency risk (-) (RMB)	—	—	1,600	(1,600)
9- Other foreign currency net effect (7+8)	(117,328)	117,328	1,600	(1,600)
Total (3+6+9)	(297,372)	297,372	(49,455)	49,455

35. Financial instruments (continued)

Exposure to currency risk (continued)

Sensitivity analysis (continued)


31 December 2021
	Profit/(Loss)		Equity
	Appreciation of	Depreciation of	Appreciation of	Depreciation of
Sensitivity analysis	foreign currency	foreign currency	foreign currency	foreign currency

1- USD net asset/liability	191,136	(191,136)	—	—
2- Hedged portion of USD risk (-)	—	—	(17,218)	20,995
3- USD net effect (1+2)	191,136	(191,136)	(17,218)	20,995

4- EUR net asset/liability	(421,664)	421,664	—	—
5- Hedged portion of EUR risk (-)	—	—	(24,020)	24,020
6- EUR net effect (4+5)	(421,664)	421,664	(24,020)	24,020

7- Other foreign currency net asset/liability (RMB)	(116,071)	116,071	—	—
8- Hedged portion of other foreign currency risk (-) (RMB)	—	—	1,960	(1,960)
9- Other foreign currency net effect (7+8)	(116,071)	116,071	1,960	(1,960)
Total (3+6+9)	(346,599)	346,599	(39,278)	43,055

Interest rate risk

As at 31 December 2022 and 2021 the interest rate profile of the Group’s variable rate interest-bearing financial instruments are as follows:


		31 December 2022			31 December 2021
		Effective			Effective
		Interest		Carrying	interest		Carrying
	Note	Rate		Amount	rate		Amount
Variable rate instruments
USD floating rate loans	28	4.4	%	(4,635,140)	3.2	%	(6,569,574)
EUR floating rate loans	28	3.2	%	(13,673,783)	2.3	%	(15,093,891)

35. Financial instruments (continued)

Exposure to currency risk (continued)

Interest rate risk (continued)

Sensitivity analysis

Cash flow sensitivity analysis for variable rate instruments:

An increase/decrease of interest rates by 100 basis points would have (decreased)/increased equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign exchange rates, remain constant. The analysis is performed on the same basis at 31 December 2022 and 2021:


	Profit or (loss)		Equity
	100 bps	100 bps	100 bps	100 bps
	increase	decrease	increase	decrease
31 December 2022
Variable rate instruments (financial liability)	(315,213)	315,213	—	—
Cash flow sensitivity (net)	(315,213)	315,213	—	—
31 December 2021
Variable rate instruments (financial liability)	(170,482)	170,482	—	—
Cash flow sensitivity (net)	(170,482)	170,482	—	—

Fair value

Fair value of the Group’s financial assets and financial liabilities that are measured at fair value on a recurring basis.

35. Financial instruments (continued)

Fair values (continued)

Valuation inputs and relationships to fair value

The following table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value measurement of contingent consideration.

Fair value at

Inputs

December

Unobservable

December

Relationship of unobservable inputs to

2022

2021

Inputs

2022

2021

fair value

Contingent consideration

—

1,245,592

Risk-adjusted discount rate

—

6.8%- 8.0%

An increase/decrease in the discount rate by 100 bps would change FV by TL (51,092) and TL 55,485, respectively.

Expected settlement date

—

in instalments between 2026-2031

If expected settlement date extended/shortened by 1-year, FV would change by TL (53,167) and TL 57,145, respectively.

Changes in the consideration payable in relation to acquisition of BeST for the years ended 31 December 2022 and 31 December 2021 are stated below:


	31 December	31 December
	2022	2021
Opening balance	1,245,592	1,063,778
Losses recognized in profit or loss	(758,261)	463,869
Inflation adjustment	(487,331)	(282,055)
Closing balance	—	1,245,592

35. Financial instruments (continued)

Exposure to currency risk (continued)

Financial assets:

Carrying values of a significant portion of financial assets do not differ significantly from their fair values due to their short-term nature. Fair values of financial assets are presented in Note 24.

Financial liabilities:

As at 31 December 2022 and 31 December 2021; for the majority of the borrowings, the fair values are not materially different to their carrying amounts since the interest payable on those borrowings is either close to current market rates or the borrowings are of a short-term nature.

The carrying amounts and fair values of non-current borrowings and current portion of non-current borrowings are as follows:


	Carrying	Fair
As at 31 December 2022:	amount	value
Bank loans	22,900,345	21,453,658
Debt securities	18,013,208	16,573,025


	Carrying	Fair
As at 31 December 2021:	amount	value
Bank loans	27,426,863	27,305,679
Debt securities	21,858,526	21,739,016

Fair value of cash and cash equivalents and debt securities issued are classified as level 1 and fair value of other financial assets and liabilities are classified as level 2.