iGRAP 21 - Effect of past decisions on materiality

CPD hours:  1

Imagine a community receiving vital crisis support through emergency relief, funding essential projects, or donating goods and services. Behind these efforts, public sector entities often engage in non-exchange transactions, where resources are transferred without direct payment or equal value in return. This is where iGRAP 21 comes into play.

iGRAP 21, or Interpretation of Generally Recognised Accounting Practice 21, guides how to recognise and account for non-exchange revenue, such as transfers, grants, or donated goods and services. It ensures these transactions are treated consistently and transparently, giving users of financial statements a clear view of how resources flow into the public sector.

For example, a municipality receiving donated equipment from a development partner must decide how to recognise the value of that donation. iGRAP 21 helps determine when and how such resources should be recorded, so that financial statements reflect a fair and accurate picture of the entity’s resources.

By clarifying the accounting treatment of non-exchange transactions, iGRAP 21 supports accountability, comparability, and better decision-making. It is not only about compliance—it is about showing clearly how public entities receive and use resources to serve their communities effectively.

Ultimately, iGRAP 21 strengthens trust in public financial reporting by ensuring that even transfers and donations are reported with transparency, responsibility, and integrity.