A contractual receivable, for example, for the sale or provision of goods or services arises from contracts that are evidenced by:

• willing parties entering into the contract;
• rights and obligations for the parties to the arrangement, even though the rights and obligations do not result in the equal performance by each party; and
• performance and remedy for non-performance are enforceable by law.

Contractual receivables are accounted for using the Standard of GRAP on Financial Instruments (GRAP 104).

The public sector is a highly regulated environment with overarching Acts and Regulations that govern the actions or behaviour of entities. Even if an entity’s operations are regulated by legislation, it does not automatically mean that all the transactions it undertakes arise from statute. Even if an entity is required to render certain services or undertake certain activities in terms of the Constitution of the Republic of South Africa, 1996, it does not necessarily mean that these services or activities are statutory.

Contractual and statutory arrangements can be distinguished in the following ways:

	Statutory receivables	Contractual receivables
How the receivable arises	Undertaken in terms of legislation or similar means.	Governed by common law.
Nature of the transaction	Parties are usually compelled to transact with each other in terms of legislation or similar means.	Parties are willing, and transactions are entered into voluntarily.
Remedies for non-performance	Usually outlined in legislation or similar.	Agreed between the parties and enforced by law.