GRAP 34 - Separate financial statements

CPD hours:  1

Imagine a public sector entity preparing its annual financial statements. Beyond simply listing income, expenses, and investments, it needs to provide stakeholders with a clear picture of the entity’s financial position and performance in relation to its separate entities. This is where GRAP 34 comes into play.

GRAP 34 provides the framework for preparing separate financial statements in South Africa’s public sector. It ensures that investments in controlled, jointly controlled, or associated entities are reported in a consistent and transparent way, allowing users to understand the financial effects of these investments on the reporting entity.

For example, a municipality may hold investments in municipal entities, joint ventures, or associates. GRAP 34 guides how these investments are measured, recognised, and disclosed in separate financial statements, providing decision-makers, oversight bodies, and the public with insights into the entity’s financial interests and risks.

By standardising the accounting for separate financial statements, GRAP 34 enhances accountability, supports informed decision-making, and allows stakeholders to see the entity’s financial position clearly, even when the reporting entity’s investments span multiple controlled or associated entities.

It is not just about reporting numbers; it is about showing how the entity manages its investments responsibly for the benefit of the community.