ACIS+4124_5124+Chapter+8+Part+1+PowerPoints+Student

ACIS+4124_5124+Chapter+8+Part+1+PowerPoints+Student - ACIS...

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1 ACIS 4124/5124 Chapter 8 – Part 1 Accounting for the Fiduciary Activities—Agency and Trust Funds
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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 Reporting Separate column of statement of fiduciary net assets Not included in statement of changes in fiduciary net assets (they have no net assets)
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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
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4 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) Agency Funds Typical Uses
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5 Assume that $1,000,000 of special assessment (SA) taxes are levied, payable in ten equal installments of $100,000 each, with 5% interest charged on the previous balance of deferred installments Interest on taxes is intended to cover interest on the special assessment bonds. When the taxes are levied: Agency Fund: Dr. Cr. Assessments Receivable—Current 100,000 Assessments Receivable—Deferred 900,000 Due to SA Bondholders—Principal 1,000,000 Special Assessment Agency Fund Example
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6 Assume all current special assessment taxes were collected in cash, along with 5% interest on the previous unpaid balance. The required agency fund entry is: Agency Fund: Dr. Cr. Cash 150,000 Assessments Receivable—Current 100,000 Due to SA Bondholders—Interest 50,000 Special Assessment Agency Fund—Example (Cont’d)
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7 Special assessment bondholders were paid principal in the amount of $100,000 and interest in the amount of $50,000 Agency Fund: Dr. Cr. Due to SA Bondholders—Principal 100,000 Due to SA Bondholders—Interest 50,000 Cash 150,000 Special Assessment Agency Fund—Example (Cont’d)
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8 At the beginning of the following year, the next installment of assessments receivable was reclassified from deferred to current status: Agency Fund: Dr. Cr. Assessments Receivable—Current 100,000 Assessments Receivable—Deferred 100,000 Special Assessment Agency Fund—Example (Cont’d)
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The Blue Ridge County tax collector acts as property tax collection agent for Blue Ridge City, the Blue Ridge Consolidated School District, and the county's own General Fund. Blue Ridge City and the school district are charged a 1% collection fee, which is passed to the county's General Fund as revenue. Tax Agency Fund
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ACIS+4124_5124+Chapter+8+Part+1+PowerPoints+Student - ACIS...

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