Transition from IAS 39 to TFRS 9 in banking sector and it's affects on stock prices of listed banks in Borsa Istanbul and financial statement table

Emerging markets and increasing, fast and easy capital movements caused necessity to have accounting principles for accounting and measurement of financial instruments. Therefore, IAS 39 Financial Instruments: Recognition and Measurement was published in 1998. International Accounting Standards Board, has changed the standard for accounting of financial instruments which has been criticized largely after 2008 global crisis. The provisions of the new "TFRS 9 – Financial Instruments" standard has been effective starting from January 1st, 2018 also for Turkey. This change has a vital importance for the banks which are holding a lot of financial instruments in their financial statement tables due to their nature of business. In this study, details and differences of IAS 39 and IFRS 9 standards are being explained and the impact analyses made by institutions from European Union and Turkey were researched. Furthermore, in the application part of the study, firstly expectations are being compared with the actual changes in the financial statement tables of listed banks in Turkey and it was observed that total provisions were increased inline with EBA estimates and contrary to BRSA expectations. Also, Common Equity Tier 1 ratio was increased and total capital ratio was decreased. Afterwards the significance of TFRS 9 implementation on the average stock prices of these banks was tested. According to the results of the model TFRS 9 implementation has significant effect on explaining changes in average stock prices of banks. Keywords: Turkish Accounting / Financial Reporting Standards, Financial Instruments, TFRS 9, TMS 39, Basel Standards