Fiduciary Funds

Fiduciary Funds - TrustandAgency (Fiduciary)Funds Chapter12

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Click to edit Master subtitle style Trust and Agency (Fiduciary) Funds Chapter 12
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Learning Objectives n are used n Define and distinguish among the four types of  funds n Prepare basic journal entries Prepare Agency Fund financial statements n Prepare Trust Fund financial statements n Account for common transactions affecting more  than one fund and GCA and GLTL accounts
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Funds held in fiduciary capacity for n Government or its programs –  endowment to finance research  program or maintain recreational area n Others, including individuals, other  governments, or private organizations
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Examples of external fiduciary  relationships n Pension plans n External investment pools n Endowments to finance scholarships for  residents of government n withheld from employees pay to be  transferred to others
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May use other funds to account  for fiduciary relationships n Special Revenue Fund – resources  available for expenditures n Permanent Fund – maintenance of  principal required n Enterprise Fund – special business-type  activities
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Accountability Focus n On the government’s fulfillment of its  fiduciary responsibilities during a  specified period and on remaining  responsibilities at the end of the period n Difference in assets and liabilities  typically called “ Net Assets Held in  Trust”
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Agency Funds n Conduit or clearinghouse funds  established to account for assets  received for and paid to other funds,  individuals, or organizations n Only used for assets held for the benefit  of others
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Allowable uses of Agency  Funds n “Pure” pass-through grants – government  serves only as a cash conduit (use of AF  mandated by GASB) n n Imprest checking account n Receipts must be allocated among several funds n Single expenditure financed by several funds
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Tax Agency Funds (TAF) n Used to combine tax levies from  multiple governments in same  geographic area n Practice avoids duplicating assessment  and collection processes
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Functions of TAF n Governments continue to maintain own tax  records. n
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Fiduciary Funds - TrustandAgency (Fiduciary)Funds Chapter12

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