Reporting Requirements for Annual Financial Reports of State Agencies and Universities Show
General Accounting Governmental Reporting Overview Fiduciary FundsThe implementation of GASB 84 increases consistency and comparability of fiduciary activity reporting by state and local governments. Financial StatementsReport fiduciary activities on the fiduciary fund financial statements of the basic financial statements based on the requirements of GASB 84. These statements provide a separate column for each fiduciary fund type (combined statement) and GAAP fund (D24) (combining statement). Use the following financial statements to present fiduciary fund financial information:
Use the economic resources measurement focus and the full accrual basis of accounting:
Statement of Fiduciary Net PositionUse the statement of fiduciary net position to report:
A liability to the beneficiaries of a fiduciary activity is recognized in a fiduciary fund when an event has occurred that compels the agency to disburse fiduciary resources. Liabilities other than those to beneficiaries are recognized in accordance with existing accounting standards using the economic resources measurement focus. Agencies that report a pension plan or other postemployment benefits (OPEB) plan in trust must report changes in the plan’s assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fiduciary net position in accordance with GASB 67 or GASB 74, as applicable. Statement of Changes in Fiduciary Net PositionUse the statement of fiduciary net position to report additions to and deductions from pension (and other employee benefit) trust funds, investment trust funds, private-purpose trust funds and custodial funds. Use the statement of changes in fiduciary net position to disaggregate additions by source including a separate display (if applicable) for:
Investment-related costs are reported as investment costs if they are separable from investment earnings and administrative costs. The statement of changes in fiduciary net position must disaggregate deductions by type and include a separate display for administrative costs. For custodial funds, agencies may report a single aggregated total for additions and a single aggregated total for deductions for which resources (upon receipt) are normally expected to be held for three months or less. The descriptions of the aggregated totals of additions and deductions must indicate the nature of the resource flows. Examples of custodial fund additions and deductions descriptions are:
Agencies that report a pension plan or OPEB plan in trust must report changes in the plan’s fiduciary net position in accordance with GASB 67 or GASB 74, as applicable. See the Templates & Sample Exhibit section for a sample statement of fiduciary net position and statement of changes in fiduciary net position. Fiduciary Component UnitsIf the agency reports a fiduciary component unit on the fiduciary fund financial statements, a fiduciary component unit must include the combined information of its own component units that are fiduciary component units. That combined information is aggregated with the agency's fiduciary funds based on the fiduciary activity: pension or OPEB trust, investment trust, private-purpose trust or custodial funds. GASB 84 Paragraph 19 ExceptionGASB 84 Paragraph 19 exception applies to business-type activities only (including enterprise funds), which may report assets with a corresponding liability, that otherwise are reported in custodial funds on the statement of fiduciary net position of the business-type activity, if those assets (upon receipt) are normally expected to be held for three months or less. Agencies that choose to follow the GASB 84 paragraph 19 exception to report all business-type activity must separately report additions and deductions (if significant) as cash inflows and cash outflows on the operating activities category of its statement of cash flows.
Or click on the headings below to open a topic individually. Terms [+]Control of AssetsThe agency controls the assets of an activity if the agency:
Own-Source RevenuesOwn-source revenues are generated by the agency and include:
Administrative InvolvementThe agency has administrative involvement with assets if it:
The agency has direct financial involvement with the assets if, for example, it provides matching resources for the activities. If the agency is a recipient of a pass-through grant, the definition of administrative involvement or direct financial involvement is followed, as prescribed in GASB 24 paragraph 5. Fiduciary Activities Criteria [+]GASB 84 establishes criteria for identifying fiduciary activities for all agencies to improve fiduciary activity reporting. Fund Types 10, 18, 20, or 22In order for the assets associated with the activity to be classified as a fiduciary activity, all of the following criteria must be met. The asset must be:
Fiduciary Component UnitsA component unit that is not a pension or OPEB arrangement is a fiduciary activity, if the assets associated with the activity have one or more of the following characteristics. The asset activity is:
Control of the assets of the component unit by the agency is not a factor to be considered. Identifying Fiduciary Activities by Fund Type [+]Valid Trust AgreementsIn order to report fiduciary activities as a trust in either FT10, FT18 or FT20, the agency must submit the applicable trust agreement(s) to for review. Pension and Other Employee Benefit Trust Funds (FT10)Pension and other employee benefit trust funds are used to report fiduciary activities for the following:
External Investment Trust Funds (FT18)Use external investment trust funds to report fiduciary activities from the external portion of investment pools and individual investment accounts that are held in a trust. Private-Purpose Trust Funds (FT20)Use private-purpose trust funds to report fiduciary activities that are not required to be reported in pension and OPEB trust funds (FT10) or external investment trust funds (FT18) and are held in a trust. Custodial Funds (FT22)Use custodial funds to report fiduciary activities that are not required to be reported in the other fiduciary activities fund types. All higher education custodial activity is reported in GAAP Fund 3400, with the exception of external investment pools that are not held in a trust, which are reported in GAAP Fund 3450. The external portion of investment pools that are not held in a trust must be reported in a separate column under the custodial funds classification. The following are the most commonly used GAAP funds that were established to record activity in custodial funds (FT22).
Materiality ThresholdThe threshold for custodial funds is set at $100,000. Any GAAP fund with yearly activity greater than $100,000 and meets the other criteria of a custodial fund must be reported in FT22. GAAP funds with yearly activity less than $100,000 must not be reported in FT22 but in a governmental or proprietary fund type and disclosed in Note 1. GASB 84 Custodial Funds Implementation Guidance [+]Presentation ChangesPre-GASB 84 (Agency Funds)
Post-GASB 84 (Custodial Funds)
The reporting presentation for fiduciary funds used to report custodial funds (FT22) are the J-1 Combining Statement of Fiduciary Net Position – Custodial Funds and J-2 Statement of Changes of Fiduciary Net Position – Custodial Funds.
Use the updated AFR Exhibit Template to ensure proper reporting presentation of fiduciary funds. Exception: A custodial fund can be reported in enterprise business-type activity (FT05) instead of FT22. Report the custodial fund on the Statement of Net Position and Statement of Cash Flows if it meets all of the following criteria:
If the fiduciary activity does not meet all of the exception criteria, it must be reported in FT22, as previously stated. Fund ChangesAgency funds are either:
Suspense Funds — Formerly “Agency Funds” [+]According to GASB 84, suspense funds are not related to fiduciary activity and are not reported in the fiduciary financial statements. Agencies must follow the reporting requirements located in the Suspense Funds tab. Requesting an Additional GAAP Fund [+]If the agency has new activity believed to be fiduciary and it does not fit the description of existing GAAP funds, a new GAAP fund may be requested from and reviewed by the Financial Reporting section. If the agency wants to request a new GAAP fund, see Requesting an Additional GAAP Fund. GASB Implementation GuideFor examples of fiduciary activity, see Implementation Guide No. 2019-2 — Fiduciary Activities. What measurement focus and basis of accounting should be used by a local government's privatePrivate-Purpose Trust Funds
These funds are accounted for using the accrual basis of accounting and use the economic resources measurement focus.
What are the measurement focus and basis of accounting for governmental funds?Which of the following would is the measurement focus and basis of accounting for governmental funds? The answer is current financial resources. Governmental funds use the modified accrual basis of accounting, which focuses on current financial resources. Revenues are recognized when they are measurable and available.
What is measurement focus in governmental accounting?Current Financial Resources Measurement Focus
Measures cash or assets that are expected to be converted to cash within or shortly after the accounting period. Measures whether the financial resources obtained during the accounting period are sufficient to cover claims against the fund during that period.
What basis of accounting is used by governmental funds?Financial statements for governmental funds should be presented using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues should be recognized in the accounting period in which they become available and measurable.
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