Changes to Fiduciary Activity Reporting

CPAs & Advisors

Brian Dixon
Brian Dixon CPA Managing Principal CPAs & Advisors

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In January 2017, the Governmental Accounting Standards Board (GASB) issued the final standard on identifying and reporting fiduciary activities under Statement No. 84.

The statement identifies four fiduciary funds that should be reported: 1) pension (and other employee benefit) trust funds, 2) investment trust funds, 3) private-purpose trust funds, and 4) custodial funds. Custodial funds generally should report fiduciary activities that are not held in a trust or equivalent arrangement that meets the specific criteria.

The majority of school district financial statements include fiduciary funds that typically include scholarship funds, trust funds, and student activity funds.

The statement establishes criteria to help school districts identify fiduciary activities and how those activities should be reported.

The statement focuses on two criteria for identifying fiduciary activities:

  • Is the school district controlling the assets of the fiduciary activity?
  • Who are the beneficiaries with whom fiduciary relationships exist?

Based on the above criteria, if you determine that your school district has fiduciary activities, then you will report a fiduciary fund in the basic financial statements.

School districts will present two financial statements for the fiduciary fund

  • A statement of fiduciary net position
  • A statement of changes in net fiduciary position.

The statement of changes in net fiduciary position is a new statement that is required for all fiduciary activities. Previously, it was only required to be presented for school districts with trust funds.

In past years, school districts recorded an asset and a corresponding liability for the various student activity funds. Under the new guidance, school districts will report all additions and deductions for the activity funds for the fiscal year, as well as an asset and net position for the fund at the end of the year.

The statement is effective for reporting periods beginning after December 15, 2018. This means for school districts the statement is effective for fiscal years ending June 20, 2020. This statement will have an impact on the reporting of fiduciary funds for all school districts. You have plenty of time to plan, identify your fiduciary activities and set up new chart of account numbers in order to start the year of implementation properly.

If you have questions or need assistance, please contact your local Yeo & Yeo professional.

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