As Tanzania adopts International Financial Reporting Standards (IFRS), one of the issues
that are likely to face many companies is the issue of accounting for interest-free or low-interest
receivables and payables. Most companies have significant low-interest or
interest-free loans from their parent or sister companies abroad. The accounting
requirements for these loans under IFRS are quite different from the previous accounting
framework, Tanzania Financial Accounting Standards (TFAS). In this paper, we will
discuss the accounting requirements for interest-free or low-interest receivables and
payables under IFRS and look at some practical challenges that companies may face in
accounting for interest-free or low-interest receivables and payables.
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