What are the differences between TFRS and BOBİ FRS?
TFRS and BOBİ FRS are the two main frameworks for preparing financial statements in Turkey. Which applies depends on the type of company, and the difference between them is not just the number of notes but how some transactions are measured and presented.
In Turkey, financial reporting standards are set by the Public Oversight, Accounting and Auditing Standards Authority (KGK). Two main sets of standards stand out:
- TFRS (Turkish Financial Reporting Standards): a comprehensive set aligned with International Financial Reporting Standards (IFRS).
- BOBİ FRS (Financial Reporting Standard for Large and Medium-Sized Entities): a single, simpler standard for large and medium-sized entities that are not public interest entities.
Both differ from the statutory books kept under tax legislation: their purpose is not to determine taxable income but to describe the company’s economic reality to external stakeholders in a standard language.
Which company applies which?
In broad terms, public interest entities (for example listed companies, banks and insurers) apply TFRS. Entities that are subject to independent audit but not required to apply TFRS apply BOBİ FRS, and may opt for TFRS. Because scope is set by KGK decisions and related legislation and can change over time, which framework applies to a given company should be confirmed against current rules.
Key differences
| Topic | TFRS | BOBİ FRS |
|---|---|---|
| Source | Aligned with IFRS; many separate standards and interpretations | A single standard, in sections |
| Complexity | High; detailed measurement and recognition rules | Simpler; simplified approaches on some topics |
| Disclosure load | Extensive | More limited |
| Leases (lessee) | Most leases recognised on balance sheet as right-of-use asset and lease liability | Distinction between finance and operating leases retained |
| Financial instruments | Detailed classification and expected credit loss model | Simpler measurement and impairment approach |
| Updates | Regularly, following changes in IFRS | Less frequently |
The table is a general comparison; the detail of each topic should be followed in the text of the relevant standard.
Why the differences matter
The same company’s statements prepared under TFRS and BOBİ FRS can differ noticeably in some lines. For a company with long-term leases, for example, TFRS increases both assets and liabilities on the balance sheet, which affects leverage ratios. Lenders and shareholders comparing statements need to know which framework was used.
Relationship with the statutory books
In Turkey, books are kept under the Tax Procedure Law and the uniform chart of accounts. Preparing statements under TFRS or BOBİ FRS usually does not mean keeping a separate set of books but making adjusting and reclassification entries on top of the statutory records. I describe the steps in converting statutory books to TFRS.
The book–tax differences that arise in the conversion are the basis of deferred tax.
Which framework to choose?
Where there is no obligation, the choice depends on who will use the statements and for what. For companies with foreign shareholders, those seeking international financing or those considering a future listing, moving to TFRS early can reduce the conversion burden later. For companies reporting only to domestic lenders and shareholders, BOBİ FRS can provide sufficient information at lower cost.
For the overall framework see the financial reporting page, and for systematising the conversion the TFRS/IFRS Reporting Software.
Frequently asked questions
Can a company applying BOBİ FRS move to TFRS?
Yes, entities within the scope of BOBİ FRS may choose TFRS. Because comparative periods may also need to be restated under the new framework, the transition should be planned in advance.
Are TFRS and IFRS the same?
TFRS is essentially the Turkish translation of IFRS, published by KGK. The content is largely the same, but effective dates and the publication process depend on KGK’s regulations.