Tanzania Cotton Board Annual Report And Accounts

FINANCIAL STATEMENTSAnnual Report and Accounts for the year ending on 30 th June 2010(b) Foreign currency translationFunctional and Presentation CurrencyItems included in the financial statements of the Board are measured using the currency ofprimary economic environment in which the Board operates (“the functional currency“). Thefinancial statements are presented in Tanzania Shillings, rounded to the nearest thousandwhich is the Board’s functional and presentation currency.Transactions and BalancesTransactions denominated in currencies other than Tanzania Shillings are translated intoTanzanian shillings at the exchange rates prevailing at the transaction date. Monetaryassets and liabilities in foreign currencies at the year end are translated into Tanzanianshillings at the rates of exchange ruling at the end of the financial year. The resultantgains/losses on exchange rate translations are recognized in the income and expenditureaccount.(c) Revenue recognitionWith exception of Government subvention which is recognized on cash basis; incomeis recognized on accrual basis of accounting. Income is recognized only when it isprobable that the economic benefits associated with the transaction will flow to the Board.Rent income is recognized at the invoiced / billed amount net of Value added tax andwithholding tax.(d) Cash and cash equivalentsCash and cash equivalents are carried in the balance sheet at face value. For the purposeof cash flow statement, cash and cash equivalents comprise cash in hand; deposits heldon call and time deposits which mature within three months or less from the date ofacquisition.(e) Government grantsGrants received for capital expenditure are classified as capital grants in the BalanceSheet, while grants received for operating expenses are treated as recurrent income andcredited in the Income and Expenditure Account. The method used for accounting forgrants in respect of capital expenditure is capital method.(f) Property, plant and equipmentProperty, plant and equipment are initially recorded at historical cost. Subsequently, theassets are stated at historical costs excluding day to day servicing, less accumulateddepreciation and accumulated impairment in value. Historical costs include expenditurethat is directly attributable to the acquisition of the items. Subsequent costs are includedin the assets carrying amount or recognized as a separate asset, as appropriate, onlywhen it is probable that future economic benefits associated with the item will flow to theBoard and the cost of the item can be measured reliably. The carrying amount of thereplaced part is derecognized.All other repairs and maintenance are charged to the profit and loss account during thefinancial year in which they occurred.29