GRAP 37 - Joint arrangements

CPD hours:  1

Imagine a public sector entity preparing its annual financial statements. Beyond simply reporting income, expenses, and assets, it must give stakeholders a clear picture of its liabilities, obligations, and provisions for future events. This is where GRAP 37 comes into play.

GRAP 37 provides the framework for recognising, measuring, and disclosing provisions, contingent liabilities, and contingent assets in South Africa’s public sector. It ensures that entities account for present obligations, possible future obligations, and potential inflows in a consistent and transparent manner, enabling users to understand the entity’s financial position and risk exposure.

For example, a municipality may face obligations such as pending legal claims, guarantees provided, or environmental rehabilitation costs. GRAP 37 guides how these liabilities are measured and disclosed, helping decision-makers, oversight bodies, and the public assess the entity’s capacity to meet its obligations and manage risks responsibly.

By standardising the treatment of provisions and contingencies, GRAP 37 supports better financial planning, strengthens accountability, and allows for more informed decision-making. It is not just about recording liabilities; it is about providing a clear window into the entity’s ability to manage future risks for the benefit of the community.