New Fiduciary Activities Guidance Issued for Governments

February 3, 2017

New guidance has been issued by the Governmental Accounting Standards Board (“GASB”) on the categorization of fiduciary activities for financial reporting, how fiduciary activities are to be reported, and when liabilities to beneficiaries must be disclosed. The standard, GASB Statement No. 84, Fiduciary Activities, provides conditions for governments to classify their fiduciary activities. These conditions include determining whether a government controls the assets of the fiduciary activity and the beneficiaries wherein a fiduciary relationship is present. Other criteria are included for recognizing fiduciary component units and postemployment benefit agreements that are fiduciary activities.

Any activity that meets the criteria stated in Statement 84 must be disclosed under a fiduciary fund in basic financial statements. Impacted governments must also offer a statement of fiduciary net position and statement of changes in fiduciary net position.

Per GASB Statement No. 84, the types of fiduciary funds that must be reported include the following:

  • Pension (and other employee benefit) trust funds
  • Investment trust funds
  • Private-purpose trust funds
  • Custodial funds

Once GASB Statement No. 84 is implemented, activities currently disclosed in agency funds must be categorized as custodial funds.