1. Fiduciary Activities
Robert M. Apple, CPA, MSA

2. Understanding GASB statement number 84
Fiduciary Activities
Understanding GASB statement number 84

3. Certified continuing professional education class
1-hour credit
Must remain for the entirety of the class to receive CPE credit
Must sign in and sign out to receive CPE credit
Certificates of attendance will be ed for CPE credit

4. Fiduciary Activities
Who/what are Governmental Accounting Standards Board (GASB) and Generally Accepted Accounting Principles (GAAP)?
Criteria for identifying and reporting
Descriptions
Component unit reporting
Recognizing liabilities
Effective December, 2018

5. What is GAAP? Proper accounting Decades of accounting practice
No authoritative book

6. What is GAAP? Does not account for every situation
Make the best choice
Rule makers leave room for options

7. What is GAAP? The grey area of materiality Qualitative aspects
Quantitative aspects

8. Who Sets Up GAAP? GASB sets the GAAP rules GASB provides:
Accounting principles
Interpretations
Guidance for implementation

9. GASB Statement No. 76 Category A Category B GASB Statements
GASB Technical Bulletins
GASB Implementation Guides
American Institute of Certified Public Accountants (AICPA) literature cleared by GASB

10. GASB Statement No. 76 If not Specified in Category A or B
AICPA literature not cleared by the GASB
Practices widely practiced by state and local government agencies
Literature from professional organizations, regulatory agencies, and authoritative accounting texts

11. Part 1 Scope and Applicability of This Statement
GASB Statement No. 84

12. Scope and Applicability of This Statement
Establishes standards of accounting and financial reporting for fiduciary activities
Transactions and other events reported for fiduciary funds requirements unchanged

13. Part 2 Identifying Fiduciary Activities
GASB Statement No. 84

14. Identifying Fiduciary Activities
Primary governments or its component units may be engaged in fiduciary activities
Criteria must be met to qualify as a fiduciary activity as we will see

15. Fiduciary Component Units
GASB Statement No. 84

16. Fiduciary Component Units
Meets criteria if one of the following arrangements:
Pension plan administered through a trust meeting criteria established in GASB 67
Other postemployment benefit (OPEB) administered through a trust following GASB 73 criteria

17. Fiduciary Component Units
Assets not a part of the reporting entity accumulated for OPEB following criteria in GASB 74
Administered through a trust whereas the government is not a beneficiary
Provides benefits to recipients
Legally protected from the creditors of the government

18. Fiduciary Component Units
Assets are a benefit of individuals
Government does not have admin or direct financial involvement with the assets
Benefits the organization or government not part of the financial reporting entity

19. Fiduciary Component Units
Control of assets of the component unit by the primary government is not a factor
Not derived from the government’s provision of goods or services to
those individuals,
organizations
or other governments

20. Pension and OPEB Arrangements That are not Component Units
GASB Statement No. 84

21. Pension and OPEB Arrangements That are not Component Units
Non component unit pension and OPEB’s are fiduciary activities if controlled by the government
Pension plans administered through a trust (GASB 67)
OPEB plan administered through a trust (GASB 74)

22. Pension and OPEB Arrangements That are not Component Units
Assets not part of the reporting entity accumulated for a pension (GASB 73)
Assets from entities not a part of the reporting entity accumulated for OPEB (GASB 74)

23. Other Fiduciary Activities
GASB Statement No. 84

24. Other Fiduciary Activities
Activities not addressed previously must meet the following criteria:
Assets associated with the activity controlled by the government

25. Other Fiduciary Activities
Assets associated with the activity are not derived either:
Solely from the government’s own-source revenues or
Government-mandated or voluntary nonexchange transactions except pass-through grants not administrated or financially involved in

26. Other Fiduciary Activities
Assets have one or more of the following characteristics:
Assets administered through a trust and the government is not a beneficiary
Dedicated to providing benefits to recipients
Legally protected from the creditors of the government

27. Other Fiduciary Activities
Assets are for the benefit of individuals or organizations
Government does not have admin or direct financial involvement with the assets
Assets not derived from the government’s provision of goods or services to those individuals or organizations

28. Control of Assets
GASB Statement No. 84

29. Control of Assets A government controls the assets of an activity if:
Holds the assets
Ability to direct the use, exchange, or employment of assets

30. Own-Source Revenues
GASB Statement No. 84

31. Own-Source Revenues Revenues generated by a government itself
Exchange and exchange-like revenues (water and sewer charges)
Investment earnings

32. Own-Source Revenues Imposed nonexchange revenues like property taxes
Derived tax revenues like sales and income taxes

33. Part 3 Reporting Fiduciary Activities in Fiduciary Funds
GASB Statement No. 84

34. Reporting Fiduciary Activities in Fiduciary Funds
Report the fiduciary activities in the fiduciary financial statements of the basic financial statements
Must meet the previously discussed requirements

35. Reporting Fiduciary Activities in Fiduciary Funds
Pensions and OPEB meeting criteria
Investment trust funds reporting external portion of investment pools and individual investment accounts
Private-purpose funds that are not pensions and OPEB

36. Reporting Fiduciary Activities in Fiduciary Funds
Custodial funds not held in trusts
Business-type activity assets and liabilities held for three months or less
Separately report additions and deductions in the operating activities category of its statement of cash flows

37. Part 4 Statement of Fiduciary Net Position
GASB Statement No. 84

38. Statement of Fiduciary Net Position
Reports:
Assets
Deferred outflows of resources
Liabilities
Deferred inflows of resources
Fiduciary net position of pension trust funds
Investment trust funds
Private-purpose trust funds
Custodial funds

39. Statement of Fiduciary Net Position
Liabilities such as taxes collected for other governments are recognized in the fiduciary fund
Report pension and OPEB trust fund information derived from previous slide’s Report’s list

40. Part 5 Statement of Changes in Fiduciary Net Position
GASB Statement No. 84

41. Statement of Changes in Fiduciary Net Position
Reports additions and deductions from:
Pension trust funds
Investment trust funds
Private-purpose trust funds
Custodial funds

42. Statement of Changes in Fiduciary Net Position
Separately display:
Investment earnings
Investment costs
Net investment earnings
Can report custodial funds held for three months or less as a single aggregate

43. Part 6 Reporting Fiduciary Component Units
GASB Statement No. 84

44. Reporting Fiduciary Component Units
Includes the combined information of its own component units that are fiduciary component units
Aggregated with the primary government’s fiduciary funds

45. Closure Enhances consistency and comparability by:
Establishing criteria for identifying fiduciary activities
Clarifying whether and how business-type activities should report their fiduciary activities

46. Questions?
GASB Statement No. 84