TAV IT

TAV AIRPORTS HOLDING AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2008
(Amounts expressed in Euro unless otherwise stated)
The consideration receivable for the construction services delivered includes direct costs of construction and borrowing and other
similar costs that are directly related to the construction of the airport and related infrastructure.
Amortisation of the airport operation right is calculated on a straight line basis. The calculated amortisation for the year ended 31
December 2008 amounts to EUR 6,733,771 for TAV Esenboğa, EUR 9,791,578 for TAV İzmir and EUR 2,573,183 for TAV Tbilisi. For
TAV Tunisie no amortisation has been calculated as the construction of the airport is still in progress. The estimated useful life of
an intangible asset in a service concession arrangement is the period from when it is available for use to the end of the concession
period.
ii) Financial assets
The Group recognizes the guaranteed amount due from DHMİ as financial asset which is determined by the agreements with TAV
Esenboğa and TAV İzmir. Financial assets are initially recognised at fair value. Fair value of financial assets are estimated as the
present value of all future cash receipts discounted using the prevailing market rate of instrument.
As at 31 December 2008, the short and long term guaranteed passenger fee receivable from DHMİ equals to EUR 179,431,222 (31
December 2007: EUR 203,907,254).
iii) Accounting for operations contract (TAV İstanbul)
The costs associated with the operations contract primarily include rental payments and payments made to enhance and improve
ADAT. TAV İstanbul prepaid certain rental amounts and the prepayment is deferred as prepaid rent and is recognised over the life of
the prepayment period. The expenditures TAV İstanbul incurs to enhance and improve the domestic terminal are recorded as prepaid
development expenditures and are being amortised over the life of the associated contract. Any other costs associated with regular
maintenance are expensed in the period in which they are incurred.
Under IFRIC 12 “Service Concession Arrangements” an operator recognises an intangible asset or financial asset received as
consideration for providing construction or upgrade services or other items. In TAV İstanbul there is no construction nor significant
upgrade service provided and the contract is in operating phase. Therefore, no intangible asset or financial asset is recognised in
TAV İstanbul’s financial statements and the revenue and costs relating to the operation services are recognised in accordance with
IAS 18 as required by IFRIC 12 (see note 43).
Amortisation of the airport operation right is calculated on a straight line basis over the BOT periods of each project from the date
of commencement of physical construction of the terminal.
g) Leased assets
Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases.
Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the
minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy
applicable to that asset.
Other leases are operating leases and the leased assets are not recognised on the Group’s balance sheet.
h) Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in first-out
principle, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in
bringing them to their existing location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and
selling expenses.