Which financial reporting framework applies: NBAA's four tiers

Two companies in the same street sell similar goods. One has turnover of TZS 850 million and assets of TZS 350 million. The other has turnover of TZS 900 million and assets of TZS 500 million. The gap between them is small, yet depending on assets and headcount they may report under different standards, and the difference changes every page of the annual accounts.

The label on a financial report is not a choice of style. The National Board of Accountants and Auditors (NBAA) assigns it by the size and nature of the entity, and a pack with the wrong label is the first thing a bank officer, a tender panel or an auditor notices. This note sets out the four tiers as the NBAA pronouncements state them, works one classification through with exact figures, and marks the point where the published text stops giving an answer.

Why does the label on a financial report matter?

A lender or a tender panel reads the accounts under the standard they claim. Azania Bank's 2023 courier tender asked bidders for audited accounts for 2022 and 2021 ⁵. The framework named on those accounts is part of what a reader checks, and it has to match the entity's size and nature.

The framework also fixes the disclosures. The framework fixes the disclosures that the accounts must carry. The entity's own accountant confirms the tier, and the desk does not decide it.

Which framework applies to which entity?

Technical Pronouncement No. 1 of 2018 was approved by the NBAA Governing Board at its 175th Ordinary meeting on 26 September 2018 and is effective for reporting periods beginning on or after 1 April 2019 ¹. It assigns four frameworks.

NGOs and associations are covered by a later pronouncement and are described below.

Who counts as a public interest entity?

The pronouncement lists listed companies, fiduciary asset holders such as banks and insurers, and large commercial entities as public interest entities. The large commercial entity test is total gross capital of not less than TZS 50 billion, combined with a significant influence on essential or strategic goods and services ¹.

The IFRS Foundation's Tanzania profile, updated on 12 June 2025, states the same TZS 50 billion gross capital test. It sets no thresholds for SMEs or micro entities, so the NBAA pronouncement is the text to read for the SME and micro tiers ⁴. One older circulated description of the SME asset test is not repeated here, because it could not be confirmed against a current source.

What are the thresholds for IFRS for SMEs and the micro-entity standard?

The two lower tiers use the same two numbers, TZS 800 million of turnover and TZS 400 million of total assets, but they use them differently. IFRS for SMEs requires both to be met at or above the number. The micro-entity standard requires any two of three tests to be met at or below the number, with average employees of not more than ten as the third test ¹.

• IFRS for SMEs: turnover of TZS 800 million or more, and total assets of TZS 400 million or more. Both must hold.
• Micro entity: two of three. Turnover of not more than TZS 800 million, assets of not more than TZS 400 million, average employees of not more than 10.
• Both tiers apply only to commercial entities that are not public interest entities.

Worked example: classifying four fictional companies

The two companies in the opening resolve the same way, assuming ten or fewer employees at the first. The company with turnover of TZS 850 million and assets of TZS 350 million is a micro entity, while the company with TZS 900 million and TZS 500 million reports under IFRS for SMEs. Turnover above TZS 800 million does not by itself take a company out of the micro tier.

What happens when an entity fits neither tier?

Nyota Agencies shows the gap. An entity with turnover below TZS 800 million and total assets above TZS 400 million, and more than ten employees, meets neither the SME test nor two of the three micro tests. The text of Technical Pronouncement No. 1 of 2018, as read, does not say which framework applies. The entity states the position to NBAA, and the accountant records the answer in the accounts.

A second point sits at the boundary. The SME test reads TZS 800 million or above and the micro test reads not more than TZS 800 million. An entity with turnover of exactly TZS 800 million, assets of TZS 450 million and 8 employees meets the SME test, and also meets two of three micro tests (turnover and employees). The text as read does not resolve the overlap, and NBAA confirms which tier governs ¹.

Which framework applies to an NGO?

Technical Pronouncement No. 3 of 2020, approved at the 182nd NBAA Governing Board meeting on 22 June 2020, requires NGOs and associations to use IPSAS in preparing general purpose financial statements for reporting periods beginning on or after 1 July 2021. Earlier application is allowed and encouraged ². The size tests do not apply to this category in the text as read.

What did Technical Pronouncement No. 1 of 2024 add?

Technical Pronouncement No. 1 of 2024, issued on 1 July 2024, adopts IFRS S1 and IFRS S2 and makes minor amendments to TFRS 1 so that sustainability and climate disclosures appear in the report by those charged with governance. Its effective date section sets 1 January 2025 as the mandatory date for public interest entities. Other entities are encouraged to comply ³.

It does not mention the reporting tiers, micro entities or IFRS for SMEs. A micro or SME entity that is not a public interest entity has no mandatory sustainability disclosure under it, as the text reads. The pronouncement adds a report to the pack for public interest entities and leaves the size tests above unchanged.

Does the same pronouncement apply in Zanzibar?

Tanzania Mainland is the default for this note. The pronouncements are issued by the National Board of Accountants and Auditors, and the text as read does not set out how they apply to an entity registered in Zanzibar. Zanzibar has its own registry and its own revenue authority, the Zanzibar Revenue Authority, which issues a ZRA Registration Number to taxpayers ⁶.

A Zanzibar entity therefore confirms its reporting framework with NBAA and with the Zanzibar registry before the accounts are finalised, and holds the ZRA registration that the tax filing requires. The desk does not assume that the Mainland position carries across.

How does the CFO Value Pack name the framework?

A report pack names its framework on the cover: full IFRS, IFRS for SMEs, FRSME or IPSAS. The CFO Value Pack names it by category. It gives an illustrative model estimate. It is not an audit, an assurance report or a valuation, and the entity's own accountant confirms the tier.

What to do now

1. Gather the three figures Take turnover, total assets and average employees from the last reporting year.
2. Test public interest status Check whether the entity is listed, a bank or insurer, or a commercial entity with gross capital of TZS 50 billion or more.
3. Run the tier tests Apply the SME test, then the two-of-three micro tests, and record each result as in the worked table.
4. Resolve a gap in writing If neither tier applies or a figure sits exactly on TZS 800 million or TZS 400 million, write to NBAA and keep the reply.
5. Confirm with the accountant Obtain the accountant's confirmation of the framework before the pack or the accounts are issued.
6. Use the decision sheet Keep the one-page sheet ⁷ with the working papers, and repeat the tests each year.

How Zatra Consultants and NEMBO handle this

Zatra Consultants Limited authors and checks the content and figures of the pack and its framework label. NEMBO designs, produces and delivers it. Short documents, such as the decision sheet, are targeted at under 30 minutes from complete details. Standard documents, such as a full pack, take hours. Research documents are dated in the written quote.

The desk prepares the pack on the framework the accountant confirms. It does not decide, and it does not guarantee, the view of NBAA, an auditor, a bank, a tender panel or any other authority on the tier or the accounts.