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Test Ch. 7-8 403
Terms in this set (24)
What is the basis of accounting for Fiduciary funds?
Economic Resources Measurement Focus and Accrual Basis of Accounting - NOT included in government wide statements.
no budgets and no encumbrances
Purpose of FF?
Account for assets held by a government acting as a trustee or agent for entities external to the governmental unit, including individuals, organizations, and other governmental units.
Now called custodial funds
Do not require a formal agreement
Accounts for assets temporarily as agent for individuals, governmental units, or organizations.
When do you recognize assets and liabilities of an agency fund?
At the time the government becomes responsible for the assets.
Can agency funds can be accounted for in governmental and/or proprietary funds?
Yes, unless mandated by governing boards differently.
Private Purpose Trust Funds
An agency relationship where the principal and/or income of trust assets is for the benefit of individuals, organizations, or other governments.
How do you value investments for FF?
Investments w/o determinable FV prices - amortized costs
investment income - revenue (net increase in FV of investments)
Endowments in real estate - report assets at FV than at historical costs.
Changes in FV = Investment Income
Investment Trust Fund
exists when the govt. is the sponsor of multi government investment pool and accounts for the external portion of trust assets.
Pension or employee benefit trust fund
Exist when the government is the trustee for a post employment plan.
Additions and Deductions
Take the place of revenue and expenses
Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position
Agency funds are no included in
Statement of Changes of Net Position bc they have no additions or deductions.
RSI for schedules.
When governments obtain property in the absence of legal claimants or heirs.
How do report Escheat property?
As an asset in governmental or proprietary funds to which the property ult. reverts. The value of unclaimed property expected to be paid out to claimants would be reported as a liability in that fund or in an agency fund
Defined Benefit Plan
The plan is required to pay out a certain level of benefit regardless of the amount available in the plan. unfunded actuarial liabilities.
Defined Contribution Plans
Provide an individual retirement account for each participating employee, and no obligation exists for pensions beyond what has been accumulated in each individual's account.
one in which each participating employer such as a city government, has a separate account and each government is responsible for keeping its own contributions up to date.
a statewide plan in which separate accounts are not kept for each employer. All funds are therefore equally over or under funded.
Statement of F NP (pensions)
reports assets, liabilities, and net position of the pension trust fund. DOES not report a liability for unfunded pension obligations.
Statement of changes in F NP (pensions)
reports additions and deductions from plan resources. additions = contributions and investment income. deductions = benefit payments and admin expenses. Excess of additions over deductions is reported as net increase in fiduciary net position.
Can you determine if a pension plan is sufficiently funded from the Fid/fund statements?
Total pension liability
the future obligation for this pension that is attributable to total years of service already performed.
measured at present value
two factors increase total pension liability: number of years worked and 2% to their level of future benefits. <- this increase in total pension liability is called
<- this in its entirety is called interest cost component.
Net pension liability
is the difference between the total pension liability and the net position of the pension fund reported in the Statement of Fiduciary Net Position
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