GRAP 5 - Borrowing costs

CPD hours:  1

Imagine a thriving public sector where all the financial transactions and reporting are seamlessly aligned, creating clear insights into the health of public resources. This is where GRAP 5 comes into play.

GRAP 5, or Generally Recognised Accounting Practice 5, focuses on the accounting for government grants and the disclosure of grants received by public entities. It sets the guidelines for how these grants should be recognised, measured, and reported, ensuring that public sector entities handle such transactions transparently and accountably.

For example, a government department may receive funding for a new project, such as developing new infrastructure or educational initiatives. GRAP 5 ensures that these funds are correctly accounted for, whether by recognising revenue or setting up related liabilities. By adhering to these principles, public sector entities can provide accurate financial reports that reflect the true status of grants and funding.

This transparency helps stakeholders, including taxpayers, to understand how grants are utilised, ensuring that funds are spent appropriately and effectively. GRAP 5 supports sound decision-making, financial accountability, and responsible use of public resources by standardising how grants are recorded and disclosed.

It’s not just about compliance; it’s about building trust with the public and ensuring that every cent of taxpayer money is properly managed for the benefit of the community.