Fundamentals of Governmental Accounting and Reporting

Chapter 7Fiduciary Funds

Learning objectives

• Identify the four types of fiduciary funds.
• Identify how certain transactions are reported in fiduciary funds.
• Identify some of the unique reporting practices of fiduciary funds.

Reporting assets held by a government for others

How should governments report assets they hold that belong to others, such as private organizations or other governments? Governments use fiduciary funds — comprising trust funds and custodial funds, among others — to report the activities of assets held for others.

The use of fiduciary funds

Governments are sometimes asked to act as fiscal agents or custodians of resources for other organizations or individuals. In addition, large governments sometimes offer programs to other governments in which the other governments’ resources will be held in, for example, an external investment pool. In these cases, resources belonging to others are held by the custodian government, which may not use them for its own programs. Fiduciary funds are used to report the activity of these resources. The custodian government has a fiduciary responsibility for these funds.

GASB Statement No. 84, Fiduciary Activities, is effective for fiscal years beginning after December 15, 2018, and establishes criteria for identifying and reporting fiduciary activities. The criteria for identifying fiduciary activities primarily focuses on (a) whether a government controls the assets of the fiduciary activity and (b) on the beneficiaries ...