On Thursday June 19th, the Governmental Accounting Standards Board (GASB) issued its Implementation Guide on Fiduciary Activities (guide). The guide was posted in draft form early in 2019 and included 53 questions and answers. GASB Statement No. 84, Fiduciary Activities (statement) is effective for reporting periods beginning after December 15, 2018 (i.e., December 31, 2019 year ends and fiscal years ending in 2020). The statement will require governments to spend time evaluating their own potential fiduciary activities in order to determine whether they are appropriately including or excluding these activities within their fiduciary funds in accordance with the new statement.
The guide should be used in conjunction with the statement to determine whether an activity is fiduciary in nature.
The guide includes a helpful Q&A section that has several questions specific to pensions and other postemployment benefit arrangements, cities, counties, and schools and universities.
Overall, the criteria in the statement is not likely to change conclusions for pension trust funds, investment funds or private purpose trust funds. However, the new criteria for custodial funds could result in activities previously reported within agency funds no longer meeting the requirements for fiduciary reporting. Thus, requiring those activities to be reported within the governmental activities or business-type activities.
The statement also requires all fiduciary funds to report a Statement of Fiduciary Net Position and a Statement of Changes in Fiduciary Net Position. As a result, governments will need to reassess whether custodial fund assets should be offset by a liability or whether the custodial fund should report a net position. This is a significant change from the presentation of agency funds, for which liabilities always offset assets. The Statement of Changes in Fiduciary Net Position will report additions to and deductions from the fiduciary fund disaggregated by source.
As a reminder, governments should take the following actions:
- Identify potential fiduciary activities
- Assess whether potential activities meet the fiduciary activity reporting criteria or should be reported as part of governmental or business-type activities
- Budget considerations regarding change in reporting activities
- Audit considerations
The full implementation guide can be found here.
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