- Türkiye's IFRS-aligned standards
- TFRSTürkiye's IFRS-aligned standards
- Hyperinflation reporting applies
- TMS 29Hyperinflation reporting applies
- Posting, two reporting outputs
- OnePosting, two reporting outputs
Challenge
A Turkish subsidiary reports late every month because the statutory accounts are converted to group policy by hand, in a spreadsheet, by one person — and the conversion is never reviewed.
Our approach
The statutory chart of accounts is mapped to the group chart once, recurring policy differences are made into standing adjustments rather than re-derived monthly, and the conversion is documented so a reviewer other than its author can check it.
Result
A month-end that produces both sets of numbers from the same source, with the differences explained rather than absorbed.
Two rulebooks, one company
A Turkish subsidiary of a foreign group is subject to two sets of rules at once. The Tax Procedure Law and the Uniform Chart of Accounts govern what must be filed locally. The parent’s accounting manual — IFRS in most cases — governs what goes into consolidation. TFRS, the Turkish standards issued by the Public Oversight Authority, is aligned with IFRS, which helps, but the statutory tax ledger is not TFRS and was never intended to be.
The differences are predictable rather than exotic:
- Depreciation. Tax lives are set by the administration; group lives reflect actual use.
- Provisions. Severance is accrued actuarially under IAS 19; the tax ledger recognises it largely when paid.
- Revenue timing. IFRS 15 obligations do not always fall where the invoice does.
- Leases. IFRS 16 puts the right-of-use asset on the balance sheet; the tax ledger keeps a rental expense.
- Foreign exchange. Functional currency under IAS 21 may not be the Turkish lira, while the statutory books have no choice.
- Hyperinflation. Türkiye meets the IAS 29 / TMS 29 criteria, so group reporting restates rather than translates.
Making the conversion an asset, not a monthly emergency
The problem is rarely that people do not know the differences. It is that the conversion lives in one spreadsheet, is rebuilt each month under time pressure, and nobody reviews it because nobody else can follow it.
We take the mapping out of the spreadsheet and into the ledger. Each statutory account maps to a group account once. Each recurring policy difference becomes a standing adjustment with a stated basis, so month-end applies it rather than rediscovering it. What remains is the genuinely judgemental — impairment, revenue cut-off, provisions — which is where the reviewer’s attention should have been all along.
What the parent receives
A monthly pack in the group’s own format and language: the mapped trial balance, the adjustment schedule with each difference explained, the local statutory position, and a short commentary on anything that moved. Auditors get the same file with the working papers behind it, which shortens the audit rather than starting an argument during it.
Where statutory audit comes in
Independent audit in Türkiye is mandatory above thresholds set by Presidential Decision — a combination of total assets, net sales and employee numbers, met in two consecutive years. The thresholds are revised periodically, so eligibility is worth re-testing each year rather than assumed from the last one; growing companies cross them without noticing.