diff --git a/grade/report/user/lib.php b/grade/report/user/lib.php
index 33af25beb3b..d6687beee8d 100644
--- a/grade/report/user/lib.php
+++ b/grade/report/user/lib.php
@@ -339,23 +339,25 @@ class grade_report_user extends grade_report {
                 $hidden = ' hidden';
             }
 
+            $hide = false;
             // If this is a hidden grade item, hide it completely from the user.
             if ($grade_grade->is_hidden() && !$this->canviewhidden && (
                     $this->showhiddenitems == GRADE_REPORT_USER_HIDE_HIDDEN ||
                     ($this->showhiddenitems == GRADE_REPORT_USER_HIDE_UNTIL && !$grade_grade->is_hiddenuntil()))) {
-                // return false;
-            } else {
-                // The grade object can be marked visible but still be hidden
-                // if "enablegroupmembersonly" is on and its an activity assigned to a grouping the user is not in
-                if (!empty($grade_object->itemmodule) && !empty($grade_object->iteminstance)) {
-                    $instances = $this->gtree->modinfo->get_instances();
-                    if (!empty($instances[$grade_object->itemmodule][$grade_object->iteminstance])) {
-                        $cm = $instances[$grade_object->itemmodule][$grade_object->iteminstance];
-                        if (!$cm->uservisible) {
-                            return false;
-                        }
+                $hide = true;
+            } else if (!empty($grade_object->itemmodule) && !empty($grade_object->iteminstance)) {
+                // The grade object can be marked visible but still be hidden if "enablegroupmembersonly"
+                // is on and it's an activity assigned to a grouping the user is not in.
+                $instances = $this->gtree->modinfo->get_instances_of($grade_object->itemmodule);
+                if (!empty($instances[$grade_object->iteminstance])) {
+                    $cm = $instances[$grade_object->iteminstance];
+                    if ($cm->is_user_access_restricted_by_group()) {
+                        $hide = true;
                     }
                 }
+            }
+
+            if (!$hide) {
                 /// Excluded Item
                 if ($grade_grade->is_excluded()) {
                     $fullname .= ' ['.get_string('excluded', 'grades').']';
diff --git a/lib/modinfolib.php b/lib/modinfolib.php
index 8a9e6dd2b85..3e5852b00ed 100644
--- a/lib/modinfolib.php
+++ b/lib/modinfolib.php
@@ -1003,17 +1003,31 @@ class cm_info extends stdClass  {
         }
         // Check group membership. The grouping option makes the activity
         // completely invisible as it does not apply to the user at all.
+        if ($this->is_user_access_restricted_by_group()) {
+            $this->uservisible = false;
+            // Ensure activity is completely hidden from user.
+            $this->showavailability = 0;
+        }
+    }
+
+    /**
+     * Checks whether the module group settings restrict the user access.
+     * @return bool true if the user access is restricted
+     */
+    public function is_user_access_restricted_by_group() {
+        global $CFG;
+        $modcontext = context_module::instance($this->id);
+        $userid = $this->modinfo->get_user_id();
         if (!empty($CFG->enablegroupmembersonly) and !empty($this->groupmembersonly)
                 and !has_capability('moodle/site:accessallgroups', $modcontext, $userid)) {
             // If the activity has 'group members only' and you don't have accessallgroups...
             $groups = $this->modinfo->get_groups($this->groupingid);
             if (empty($groups)) {
                 // ...and you don't belong to a group, then set it so you can't see/access it
-                $this->uservisible = false;
-                // Ensure activity is completely hidden from user.
-                $this->showavailability = 0;
+                return true;
             }
         }
+        return false;
     }
 
     /**