Effects of Turkish accounting standards on accounting of factoring transactions and application of discounted factoring transactions at a factoring company

Since the second half of the twentieth century, alternative financing techniques have begun to emerge for businesses due to the ever increasing competition in world trade. New techniques are developed in order to meet the financing needs of businesses at appropriate terms and within the required period of time. Factoring is one of those techniques that is being used for this purpose. Factoring is being applied in Turkey as a result of international expansion in economy after 1980's. Factoring activities, which were initially carried on within banks, are then started to be maintained as factoring companies that have separate legal entities. Connection of factoring companies to Banking Regulation and Supervision Agency (BRSA) is an indicator of importance given to these companies. Factoring operations are included in the law after the "Act of Leasing, Factoring and Financing Companies". A legal framework and an effective supervision and auditing system, in which companies may be established and operate in accordance with the dignity of a financial institution, are created with this law. This study aims to show that what effects of Turkish Accounting Standards on accounting of factoring transactions are and how accounting of discounted factoring transactions are applied in a factoring company. Besides, determination of some changes in accounting of factoring transactions after application of accounting standards, it is observed that there are some differences between literature and application in context of accounting treatment of discounted factoring transactions by factoring companies. Keywords: Factoring, Accounting of Discounted Factoring Transactions, TurkishAccounting Standards, Turkish Financial Reporting Standards