Fiduciary Funds
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FIDUCIARY FUNDS
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Transcript of Fiduciary Funds
FIDUCIARY FUNDS
OWNERSHIPCONTROL
BENEFIT/RISK
ELEMENTS
OWNERSHIPCONTROL
BENEFIT/RISK
ELEMENTSThree characteristics to look at:1. Ownership – the government does not haveownership of the assets in a fiduciary fund2. Control – the government has control of theassets in a fiduciary fund3. Benefits or Risk – the government is not thebeneficiary of the assets in a fiduciary fund noris it responsible for the debt.
ERMAAND
ACCRUALFiduciary funds follow the ERMA and accrual method ofaccounting.
AGENCYPENSION TRUST
PRIVATE-PURPOSE TRUSTINVESTMENT TRUST
Four types of fiduciary funds.
GOVERNMENT-WIDE
STATEMENTS
GOVERNMENT-WIDE
STATEMENTS
Fiduciary funds are notincluded in the governmentwide financial statements. They appear in the CAFR asstand alone statements.
STATEMENT OF CHANGES IN FIDUCIARYNET POSITION
STATEMENT OF CHANGES IN FIDUCIARYNET POSITION
The Statement of Changes in Fiduciary NetPosition is not an income statement. Thereis no income statement equivalent forfiduciary funds because the assets do notbelong to the government. Therefore, theterms “revenue and expense” are not used. Rather, items on the statement are either“additions” or “deductions”.
AGENCY FUNDS
ASSETS = LIABILITIES
AGENCY FUNDS
ASSETS = LIABILITIES
Key point about agencyfunds – there is no netposition. Assets equalliabilities.
PENSIONSLIABILITY
VSTRUST FUND
KNOW THE DIFFERENCE!
PENSIONSLIABILITY
VSTRUST FUND
KNOW THE DIFFERENCE!
Do not confuse pension liability withthe pension trust fund. The trust fundis comprised of assets alreadycontributed to the plan. The liability isthe amount the government owes tothe plan.
WHO BENEFITS?PRIVATE PURPOSE
VSPERMANENT
KNOW THE DIFFERENCE!
WHO BENEFITS?PRIVATE PURPOSE
VSPERMANENT
KNOW THE DIFFERENCE!
A permanent fund is usedto account for assets thatbenefit the public or a largesegment of the population. Private-purpose fundsbenefit narrow groups.
WHOSE ASSETS?INVESTMENT TRUST
VSGOVERNMENTAL FUND
KNOW THE DIFFERENCE!
WHOSE ASSETS?INVESTMENT TRUST
VSGOVERNMENTAL FUND
KNOW THE DIFFERENCE!
The assets used to establish the investments cancome from many sources. Those sources includefunds of the managing government and the funds ofother unrelated governments. The portionrepresenting the managing government's money isnot accounted for in the fiduciary fund. Rather, agovernmental fund would be used. Assets ofunrelated governments are accounted for in aninvestment trust fund.
GASB REQUIRESFAIR VALUE
ACCOUNTING
DON'T SEPARATE
AND REALIZED
UNREALIZED
DON'T SEPARATE
AND REALIZED
UNREALIZED
Do not report unrealized gain &losses separate from realizedgains & losses in the financialstatements. Note disclosures areok, financial statementpresentation is not.
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