tailieunhanh - Lecture Accounting for Governmental & nonprofit entities (16/e): Chapter 8 - Jacqueline, Suzanne, Earl

Chapter 8 - Accounting for fiduciary activities - Agency and trust funds. After studying Chapter 8, you should 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,. | Chapter 8 Accounting for Fiduciary Activities—Agency and Trust Funds ` Learning Objectives After studying Chapter 8, you should 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 Explain the activities of and accounting and financial reporting for commonly used agency funds 1 Learning Objectives (Cont’d) Explain the purpose, accounting, and financial reporting for: A cash and investment pool (including an investment trust fund) A private-purpose trust fund A pension trust fund Describe accounting for other postemployment benefits 2 Purpose To account for assets held by a government acting as an agent for one or more other governments, individuals, or private organizations Agency Funds 3 Agency Funds Use an agency fund if: Dollar amount of transactions dictates use of agency fund for accountability reasons Its use will improve financial management or accounting Mandated by law, regulation, or GASB standards Special assessment accounting when the government is not obligated in any manner for special assessment debt Tax agency funds (very common usage) Pass-through agency funds (not as common) Note: An agency fund is generally not needed for routine agency relationships such as payroll withholding Agency Funds— Typical Uses 3 To account for special assessments when only the benefited taxpayers, and not the government, are obligated to pay interest and principal on the special assessment debt The government must not have indicated in any way its intent to be responsible for the debt The government is simply acting as an agent for the benefited property owners, as well as the special assessment bondholders Special Assessment Agency Funds 3 Assume that $1,000,000 of special assessment (SA) taxes are levied, payable in ten equal . | Chapter 8 Accounting for Fiduciary Activities—Agency and Trust Funds ` Learning Objectives After studying Chapter 8, you should 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 Explain the activities of and accounting and financial reporting for commonly used agency funds 1 Learning Objectives (Cont’d) Explain the purpose, accounting, and financial reporting for: A cash and investment pool (including an investment trust fund) A private-purpose trust fund A pension trust fund Describe accounting for other postemployment benefits 2 Purpose To account for assets held by a government acting as an agent for one or more other governments, individuals, or private organizations Agency Funds 3 Agency Funds Use an agency fund if: Dollar amount of transactions dictates use