CHAPTER 8

FIDUCIARY FUNDS

Introduction

Agency Funds

Pass-Through Grants

Special Assessments

Pension (and Other Employee Benefit) Trust Funds

Deferred Compensation Plans

Investment Trust Funds

Private-Purpose Trust Funds

Summary

INTRODUCTION

Governments are often required to hold or manage assets on behalf of others. NCGAS 1 recognized the need for fiduciary funds (known as trust and agency funds prior to GASBS 34), “to account for assets held by a governmental unit in a trustee capacity or as an agent for individuals, private organizations, other governmental units, and/or other funds.”

GASBS 34 updated the types of fiduciary funds to include the following:

1. Pension (and other employee benefit) trust funds
2. Investment trust funds
3. Private-purpose trust funds
4. Agency funds

The funds are reported under GASBS 34 only in fiduciary fund financial statements. They are not reported as part of the government-wide financial statements.

Each of these fund types is described below. In addition, Chapter 22 describes the accounting and financial reporting principles used by pension trust funds.

AGENCY FUNDS

Agency funds are used to account for assets held solely in a custodial capacity. As a result, assets in agency funds are always matched by liabilities to the owners of the assets

The accounting and financial reporting for agency funds are unique and do not really follow those of governmental funds or proprietary funds. Agency funds use the modified accrual basis of accounting for ...

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