Countdown to Implementation:
Preparing for the Fiduciary Activities Guidance

The GASB issued Statement No. 84, Fiduciary Activities, in early 2017 to clarify what constitutes a fiduciary activity for accounting and financial reporting purposes and how fiduciary activities should be reported.

The new guidance will enhance the consistency and comparability of fiduciary activity reporting by state and local governments and improve the usefulness of fiduciary activity information primarily for assessing the accountability of governments in their roles as fiduciaries.
With the requirements of Statement No. 84 becoming effective for reporting periods beginning after December 15, 2018, it is time to begin planning for implementation.

With the requirements of Statement No. 84 becoming effective for reporting periods beginning after December 15, 2018 (with earlier application encouraged), it is time to begin planning for implementation.

Preparing for Implementation

What follows is a brief list of issues governments may want to consider as implementation draws closer:
  • Education and training on the new standards
  • Time and effort necessary to evaluate potential fiduciary activities in light of the new definitions and criteria
  • Possible changes in accounting systems and procedures, and
  • Potential additional audit work. 
In some cases, state and local governments won’t have any changes in what activities they are currently reporting in fiduciary funds. The only way they will know this, however, will be by reviewing the fiduciary activities standards and assessing what they’re currently reporting to determine if reporting an activity as fiduciary remains appropriate. Governments also will need to consider other activities they’re engaged in that potentially could be fiduciary activities under the new standard.

Statement 84 also clarifies the requirements for what activities are reported in pension (and other employee benefit) trust funds, investment trust funds, private-purpose trust funds, and custodial funds (including activities previously classified as agency funds). One possible result of applying this part of the standards is that fiduciary activities previously reported in one of the three kinds of trust funds would henceforth be reported in the new custodial funds category.

Under Statement 84, business-type activities (BTAs) like public universities, hospitals, and utilities that are engaging in fiduciary activities may need to begin reporting them in fiduciary fund financial statements.

State and local government financial statements will see some additional changes, such as:
  • What is reported as a liability of a fiduciary fund
  • The level of detail of additions and deductions
  • The reporting of fiduciary components combined with information from their own fiduciary component units, and
  • The presentation of former agency funds (included in custodial funds) in the statement of changes in fiduciary net position.
More information about fiduciary activities.