GRAP 36 - Investments in associates and joint ventures

CPD hours:  1

Imagine a public sector entity that has investments in joint ventures or associates. Beyond reporting on its own financial activities, it also needs to reflect the results and financial position of these arrangements in a way that gives stakeholders a complete picture of its involvement. This is where GRAP 36 comes into play.

GRAP 36 provides the framework for accounting for investments in joint ventures and associates in South Africa’s public sector. It ensures that these relationships are recognised and measured consistently, offering transparency in how entities share control, influence decisions, and benefit from collaborative arrangements.

For example, a municipality may enter into a joint venture to develop shared infrastructure, or it may hold significant influence over an associate responsible for providing essential services. GRAP 36 guides how such interests are recognised—whether through the equity method or proportional recognition—so that the financial statements fairly represent the substance of these arrangements.

By standardising the accounting for joint ventures and associates, GRAP 36 helps stakeholders understand the extent of an entity’s commitments, the resources it can access, and the risks it may face. It supports better accountability, informed decision-making, and a clearer view of how collaboration impacts the financial health and sustainability of the public sector.

Ultimately, GRAP 36 is not only about compliance—it is about presenting a faithful picture of partnerships and shared responsibilities that contribute to delivering services to the community.