tailieunhanh - Lecture Essentials of accounting for governmental and not-for-profit organizations (12/e) – Chapter 7

Chapter 7 - Fiduciary funds. In this chapter students will be able to: Explain how trust and agency funds are used to report on the fiduciary activities of a government, distinguish among agency funds and trust funds (private-purpose, investment, and pension), describe the uses for and characteristics of agency funds. | Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter 7 Fiduciary Funds Copyright © 2015 McGraw-Hill Education. All rights reserved. Chapter 7 – Learning objectives Identify the fiduciary funds and describe when each is appropriate Apply the accrual basis of accounting in the recording of typical transactions of agency, private-purpose trust, investment trust, and pension trust funds Prepare the fund-basis financial statements for fiduciary funds Apply GASB standards for the measurement and reporting of investments Overview of Fiduciary Funds Fiduciary funds report resources which do not belong to the government but which are being held by the government as agent or trustee. As a general rule the accrual basis and economic resources measurement focus are used. Agency funds do not have revenues, expenses or net position -- their accounting equation is Assets=Liabilities Pension trust funds only reflect the obligation for pension benefits currently due government retirees -- not the obligation to future retirees Fiduciary Funds and the Government-Wide Financial Statements Fiduciary assets are NOT included in the government-wide statements because the resources are not available for general use They are reported at the fund level only. Fiduciary Funds are not included in government-wide Government-wide Statement of Net Position and Statement of Activities Agents vs. Trustees The difference in agents and trustees is a legal distinction concerning the responsibilities of the fund manager. Agents hold assets and keep them safe from theft etc. Trustees are responsible for not only holding the assets safely, but also for administering an investment program to earn a reasonable return on the principal. Common Uses of Agency Funds Collection of taxes to service special assessment debt Used when governments are not legally obligated to pay the debt in case of default by citizens. Tax agency fund When you have property taxes supporting governments | Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter 7 Fiduciary Funds Copyright © 2015 McGraw-Hill Education. All rights reserved. Chapter 7 – Learning objectives Identify the fiduciary funds and describe when each is appropriate Apply the accrual basis of accounting in the recording of typical transactions of agency, private-purpose trust, investment trust, and pension trust funds Prepare the fund-basis financial statements for fiduciary funds Apply GASB standards for the measurement and reporting of investments Overview of Fiduciary Funds Fiduciary funds report resources which do not belong to the government but which are being held by the government as agent or trustee. As a general rule the accrual basis and economic resources measurement focus are used. Agency funds do not have revenues, expenses or net position -- their accounting equation is Assets=Liabilities Pension trust funds only reflect the obligation for pension benefits currently due .