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Secure Your Company Finances: Calculate the Power of Inflation!

Inflation accounting can be defined as the closest possible calculation of the non-monetary account items in the financial statements of companies by multiplying them by the purchasing power correction coefficient as of the date the financial statements are prepared.

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Why is Inflation Accounting Applied;

  1. To prevent the increase of unreal profits in the financial statements due to inflation.
  2. To ensure that non-monetary resources reflect their real values.
  3. To be able to track financial statements with values close to reality.
  4. To adjust the financial statements of companies to their real values, protect the capital values of businesses, and interpret the risks brought by inflation.

Who is Subject to Inflation Accounting, Who is Not;

Those Subject;

  1. Income and corporate tax payers who keep books based on the balance sheet are subject to inflation accounting. (Including limited partnerships, general partnerships, and cooperatives)

Those Not Subject;

  1. Those who keep books based on the operating principle
  2. Freelancers (except depreciation)
  3. Those who do not keep accounting records in TRY
  4. Companies that keep books based on the balance sheet, who have not exceeded the 3-year period of switching from keeping records in foreign currency to TRY

For which accounts will inflation adjustment be made?

In the financial statements dated 31.12.2023, inflation adjustment will be made for non-monetary items as stated in Article 298 of the Tax Procedure Law. Monetary items will not be subject to inflation adjustment.

Inflation adjustment operations will be made to the related balance sheet accounts, and no adjustment will be made to the income statement accounts.

Non-Monetary Assets

  • Stocks
  • Inventories
  • Advances Given Related to Inventories
  • Long-term Construction Costs
  • Expenses for Future Periods
  • Affiliates
  • Tangible and Intangible Fixed Assets
  • Advances Collected Related to Goods and Services
  • Income for Future Periods
  • Equity Items

Non-Monetary Assets

  • Cash Equivalents
  • Securities
  • Short and Long-term Trade Receivables
  • Financial Debts
  • Trade Payables
  • Debt and Expense Provisions