Milli Re 2025 Annual Report

2.1.2 Other related accounting policies appropriate for the understanding of the financial statements Other accounting policies The Company records premium, commission, and claims accruals based on notifications received from insurance and reinsurance companies. Since these notifications are transmitted to the Company with a delay, dependent on the ceding companies closing their own accounts, premiums, claims, and commission accruals related to proportional reinsurance contracts are reflected in the Company’s financial statements with a three-month delay. The unearned premium amounts allocated for these proportional transactions are calculated as deferred amounts as of the balance sheet date, based on the record date when account summary notifications from ceding companies are recognized by the Company, as explained in footnote 2.24. Therefore, the amounts included in the income statement items prepared as of December 31, 2025, consist of the totals for the three-month accounting period from October 1 to December 31, 2024, and for the nine-month accounting period from January 1 to September 30, 2025, representing the totals for the last year. The same delay effect is also reflected in the Company’s balance sheet prepared as of December 31, 2025. According to the letter dated August 31, 2010 and numbered B.02.1.HZN.0.10.03.01/42139 sent by Republic of Turkey Ministry of Treasury and Finance to the Company, it is stated that account statements sent by the ceding companies are subject to possible delays and Republic of Turkey Ministry of Treasury and Finance is considered special situations of the reinsurance companies in their regulations. Information regarding other accounting polices is disclosed above in “Note 2.1.1 - Information about the principles and the specific accounting policies used in the preparation of the financial statements” and each under its own caption in the following sections of this report. 2.1.3 Current and presentation currency The accompanying unconsolidated financial statements are presented in TL, which is the Company’s functional currency. 2.1.4 Rounding scale of the amounts presented in the financial statements Financial information presented in TL, has been rounded to the nearest TL values. 2.1.5 Basis of measurement used in the preparation of the financial statements The accompanying financial statements are prepared on the historical cost basis as adjusted for the effects of inflation that lasted until December 31, 2004, except for the financial assets held for trading, available-for-sale financial assets, derivative financial instruments, self-used buildings and investment properties recorded in tangible assets and associates which are measured at their fair values unless reliable measures are available. 2.1.6 Accounting policies, changes in accounting estimates and errors Changes in accounting policies or accounting errors are applied retrospectively, and prior year financial statements are adjusted accordingly. If estimated changes in accounting policies are only for one period, changes are applied on the current year but if estimated changes are for the following periods, changes are applied both on the current and following years prospectively. Critical accounting judgements used in applying the Company’s accounting policies are explained in 3 - Significant accounting estimates and requirements. 129 Notes to the Unconsolidated Financial Statements As of December 31, 2025 Millî Reasürans Türk Anonim Şirketi GENERAL INFORMATION FINANCIAL RIGHTS PROVIDED TO THE MEMBERS OF THE GOVERNING BODY AND SENIOR EXECUTIVES RISKS AND ASSESSMENT OF THE GOVERNING BODY ACTIVITIES AND MAJOR DEVELOPMENTS RELATED TO ACTIVITIES RESEARCH & DEVELOPMENT ACTIVITIES FINANCIAL STATUS FINANCIAL INFORMATION (Currency: Turkish Lira (TRY)) (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish)