Directors Report: Tanzania Financial Reporting Standard (TFRS) 1
Directors Report: Tanzania Financial Reporting Standard (TFRS) 1
Directors Report: Tanzania Financial Reporting Standard (TFRS) 1
Directors report
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Coverage
Introduction
Directors report
Objectives of TFRS 1
Scope of TFRS 1
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Introduction
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Introduction
International Accounting Standards
Year Developments
1973 The International Accounting Standards Committee (IASC) was
formed in 1973.
to It was the first international standards-setting body.
It was composed of professional accounting bodies of Australia,
2000 Canada, France, Germany, Japan, Mexico, Netherlands, UK and
the US.
IASC issued International Accounting Standards (IAS).
2001 IASC was reorganized.
It became the International Accounting Standards Board (IASB).
IASB adopted IAS.
2003 IASB issued the first International Financial Reporting Standard
(IFRS), IFRS 1 “First time adoption of International Financial
to date Reporting Standards” in 2003.
Currently a series of 17 IFRS and 41 IAS have been issued.
However...
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Introduction
International Accounting Standards
Although the series of IAS is from IAS 1 to IAS 41, there are currently 24 IAS.
Some of the IAS were replaced by other IAS, some were replaced by IFRS and
some were withdrawn. For example:
IAS Replacement
Standard Description Standard Description
There are currently 16 IFRS in a series of IFRS 1 to IFRS 17. IFRS 17 “insurance
contracts” was issued in 2017, amended in 2020 and is effective from annual
reporting periods beginning on or after 1 January 2023. IFRS 17 replace IFRS 4
“insurance contracts”.
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Introduction
The National Board of Accountants and Auditors (NBAA) and
Accounting Standards
Year Developments
Prior No any accounting standards.
1972 No NBAA
No any Act of parliament for Auditors and Accountants.
Accountants and auditors relied on their training backgrounds.
1972 NBAA was established under the Auditors and Accountants
(Registration) Act No.33 of 1972 as amended by Act No.2 of 1995
to and CAP 286 (R.E. 2002).
Its operations began on 15th January 1973.
1982 It formed an Accounting Standards Steering Committee to formulate
the accounting and auditing standards in 1981.
No any accounting standards were issued.
1983 NBAA issued the first three sets of accounting standards, known as
Tanzania Statements of Standards Accounting Practice (TSSAP) no.
1, 2 & 3.
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Introduction
The National Board of Accountants and Auditors (NBAA) and
Local Accounting Standards in Tanzania
Year Developments
1984 TSSAP 2 had an inclusive focus.
Therefore, there was a project of issuing accounting guidelines for
to each of the topics identified under TSSAP 2.
Accounting guidelines were consolidated into accounting standards
2003 - known as the Tanzania Financial Accounting Standards (TFAS) and
TSSAP 2 was withdrawn on 1st July 2001.
30 TFAS were issued by 30th July 2002 – they were similar to
International Accounting standards (IAS) in all respects.
2004 Due to the global pressure for adoption of international accounting
standards, On 1st July 2004, the NBAA adopted IAS.
TFAS, which had no equivalence to international standards (e.g.
TFRS 1) continued to be used.
References:
Mbelwa, L. H. & Mahangila, D. N. (2019). Critical External Institutional Pressures towards Effective Implementation
of IFRS in the Tanzanian Private Hospital Sector, ORSEA Journal Vol. 9.
Killagane, Y. (2006). Financial Accounting for Professional Students, Volume 2, National Board of Accountants
and Auditors, Dar es Salaam, Tanzania. 7
Directors Report
It is an important document of Annual Report in which those charged
with governance gives a complete review of the entity‟s operations,
financial performance, financial position, budget implementation and cash
flows of the entity during the year.
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Directors Report
Annual report is composed of documents, including financial statements,
auditors report and directors report.
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Overview of TFRS 1
NBAA originally issued „TFAS 12 – Directors Report‟ in January 1999,
which was revised to continue to give entities guidance in preparing
directors report.
TFRS 1 “The Directors Report” which was approved and issued by the
NBAA on 15th October, 2009 replaced TFRS 1 which was issued on 2009
and was effective from 1st January 2010.
NBAA Governing Board approved the issuance of the revised and the
current TFRS 1 “The Report by those charged with Governance” on 22nd
June, 2020. The standard was effective from 1st January 2021.
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Objective of TFRS 1
To build a framework for discussion of the main factors underlying an
entity‟s operations, financial performance, financial position, budget
implementation and cash flows of the entity.
To enable primary users and other stakeholders to understand how their
interests have been or are accommodated in the entity‟s current and
future plans.
It only identifies information to be included in the report. It does not set
benchmarks for quality of the items to be disclosed.
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Scope of TFRS 1
According to TFRS 1, the report should cover the following areas:
Development and performance of the entity‟s operation, including
underlying factors and main trends.
How resources whether or not owned by the entity have been used
toward creating value over the short, medium and long term period.
Main trends of the entity‟s business and factors that have affected
and those which are likely to affect the business.
Resources
Cash flows
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Features and Contents of TFRS 1
Liquidity
Employee welfare
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