Registration and reporting system for changeover practice from the financial profit to the trading profit

The importance of expressing a mutual sense of globalization and financial statement prepared by enterprises is increasing some more for all financial statement users day by day. Therefore, the financial reporting standards published by "International Accounting Standards Board" in order to secure uniformity of the financial reporting have been adopted and performed by the many countries. When we look from the viewpoint of our country, these standards have been entered into force by translating to Turkish under the name of "Turkey Accounting Standards" with purpose of either conformity with The European Union Criteria or internationally securing uniformity of the financial reporting. We predict that these standards used by certain-sized companies in our country at present will be used by all enterprises in the upcoming years. There are significant differences between the adopted financial reporting system and TMS/TFRS standards in our country. When the financial statements prepared in accordance with tax legislation of our country are prepared again within the scope of TMS/TFRS, very different results arise in the sense of both practices. While the financial statements prepared in accordance with tax law bring tax effects into the forefront, the financial statements prepared in accordance with the provisions of TMS/TFRS prioritize to present the actual financial condition and financial structure of enterprise. The purpose of this study is to explain how the difference between the trading profit and financial profit occurs. The financial statement items examined in terms of VUK and TMS/TFRS practices have been examined under the different titles for both practices and necessary statements have been made. The consolidation of the subject has been aimed by preparing the balance sheet and income statement showing the differences between VUK and TMS/TFRS making the application study in the final section. Keywords: Turkey Accounting Standards, Valuation, Valuation Methods, Deferred Tax, Trading Profit and Financial Profit, Tax Procedure Law, Reporting