Project Pages

Implementation Guidance—Fiduciary Activities

Project Description: The objective of this project is to publish question-and-answer guidance to assist state and local governments and other stakeholders in addressing implementation issues associated with Statement No. 84, Fiduciary Activities.

Status:
Implementation Guide No. 2019-2, Fiduciary Activities, cleared for issuance: June 2019

Implementation Guide for Fiduciary Activities—PROJECT PLAN


Background: Specific issues were raised by respondents to the Exposure Draft, Fiduciary Activities, which were identified as candidates for consideration in an Implementation Guide. The staff is beginning to receive questions about the standards during speaking engagements, and technical inquiries are being submitted by stakeholders. Further, the project staff anticipates a high volume of questions once state and local governments begin to plan for initial implementation.

Accounting and Financial Reporting Issues: This project addresses issues related to the key aspects of Statement 84. Potential topics include but are not limited to:
  1. How the standards may impact the application of Statement No. 14, The Financial Reporting Entity, as amended
  2. Applying the fiduciary activities criteria to pension and other postemployment benefit (OPEB) arrangements, including deferred compensation plans and defined contribution plans
  3. Applying the fiduciary activities criteria to activities that are not pension or OPEB arrangements
  4. Determining which fiduciary fund type should be used to report a fiduciary activity
  5. Reporting fiduciary activities in fiduciary fund financial statements
  6. Reporting of fiduciary activities by stand-alone business-type entities. 
Guidance would be limited to clarifying, explaining, or elaborating on the standards contained in Statement 84.

Project History:
  • Added to current technical agenda: December 2017
  • Consultative group appointed? Yes
  • Deliberations began: October 2018
  • Exposure Draft cleared: December 2018
  • Comment period: December 2018–February 2019
  • Redeliberations began: April 2019
  • Implementation Guide No. 2019-2, Fiduciary Activities, cleared for issuance: June 2019  

Implementation Guide for Fiduciary Activities—RECENT MINUTES


Minutes of Meetings, June 5–6, 2019
 
The Board reviewed a ballot draft of a final Implementation Guide No. 2019-2, Fiduciary Activities. The Board did not object to the issuance of the Implementation Guide.

Minutes of Teleconference, May 13, 2019

The Board reviewed a preballot draft of a final Implementation Guide, Fiduciary Activities. The Board considered the project staff’s recommendations and tentatively did not object to modifications related to certain proposed questions and answers, including clarifying edits and the removal of Questions 4.11, 5.2, and 5.5.

The Board did not object to the preparation of a ballot draft of a final Implementation Guide, Fiduciary Activities, for consideration at the June 2019 Board meeting.

Minutes of Meetings, April 22–24, 2019

The Board discussed feedback received from respondents to the Exposure Draft of the proposed Implementation Guide, Fiduciary Activities. The Board considered the project staff’s recommendations for potential modifications to certain proposed questions and answers in response to that feedback. A majority of the Board did not object to the project staff’s recommendations, which were as follows:
  • No modifications should be made to Question 4.1 or Question 4.2.
  • The answer to Question 4.3 should be modified to include the paragraphs of Statement 84 that would be applicable if the equivalent arrangement is legally separate.
  • Question 4.5 and Question 4.6 should be modified to clarify which government is being referred to in the questions, and to include in the answers to Question 4.5 and Question 4.6 the full provision in paragraph 7 of Statement 84 of when a government is considered to have a financial burden.
  • No modifications should be made to Question 4.8.
  • No modifications should be made to Question 4.12 and Question 4.13.
  • The answer to Question 4.15 should be modified to clarify that the assets may be used in a manner that generates revenue for the county but that the assets themselves cannot be derived from the county’s own source revenues in order for the activity to be fiduciary. Furthermore, the answer to Question 4.15 should be modified to include a cross-reference to Question 4.25, which provides a related, broader example of when a government would not have administrative involvement.
  • Question 4.16 should be modified to include language that explains why the amounts withheld are liabilities of the government.
  • No modifications should be made to Question 4.17.
  • No modifications should be made to Question 4.18.
  • No modifications should be made to Question 4.21.
  • No modifications should be made to Question 4.22.
  • No modifications should be made to Question 4.23.
  • No modifications should be made to Question 4.24.
  • The answer to Question 4.25 should be modified to include a cross-reference to Question 4.15, which provides an example of when inmate accounts would be a fiduciary activity because the government (county) does not have administrative involvement.
  • Question 4.28 should be modified to remove “at the end of the school year,” as this makes the fact pattern more indicative of how scholarships generally are awarded without impacting the answer.
  • No modification should be made to Question 4.29.
  • No modification should be made to Question 4.30.
  • The answer to Question 4.31 should be modified for clarity by initially defining “derived from” and reinforcing the rationale that holding the resources is the service itself rather than being derived from the service.
  • No modification should be made to Question 4.32.
  • No modification should be made to Question 4.33.
  • No modification should be made to Question 4.35.
  • Question 4.36 should be modified to (1) explain the existence of the county’s business licensing fee revenue stream prior to and separate from a revenue-sharing agreement with the state and (2) discuss the revenue-sharing agreement to illustrate the point that the fees are the government’s own-source revenue.
  • Question 4.37 should be modified by removing the second sentence of the question and subsequent references to the board of regents to focus on the key aspects of the question; the determination of whether the student activity fees collected are own-source revenues of the university and that the university is obligated to provide a product or service for which the fee is being charged. Furthermore, modifying the answer so that management authorizes the expenditures, rather than the board of regents, would be more indicative of practice.
  • No modifications should be made to Question 4.41.
  • No modifications should be made to Question 4.44.
  • The first sentence of Question 4.45 should be modified for clarity by explaining that the leasehold excise tax is levied by the state and the county, rather than the port authority.
  • No modifications should be made to Question 4.47.
  • Question 4.48 should be modified by adding a cross-reference to Question 4.49 to further clarify that the additions and deductions from multiple activities meeting the disaggregation criteria cannot be combined.
  • Question 4.49 should be modified by adding a cross-reference to Question 4.48, which provides an example of a government being able to report an aggregated total for additions and an aggregated total for deductions for an activity in which the assets are expected to be held for three months or less.
  • No modification should be made to Question 4.52; however, the question and answer should be moved to the custodial funds section of the implementation guide and the new Question 4.45 and all subsequent questions should be renumbered appropriately.
  • Question 4.53 should be modified to clarify that the university also is engaging in fiduciary activities other than the fiduciary component units to align the question with the answer provided.
Question 4.11 will be discussed further at the May teleconference when the project staff will provide the results of additional research to either support the answer or recommend removing the question.
 
The Board did not object to moving forward with a preballot draft of a final Implementation Guide, Fiduciary Activities, that will be discussed at the May 2019 teleconference.

Minutes of Meetings, December 17–19, 2018
 
The Board reviewed a ballot draft of an Exposure Draft of a proposed Implementation Guide, Fiduciary Activities, and provided suggestions for clarifying edits. The Board unanimously voted not to object to the issuance of an Exposure Draft of a proposed Implementation Guide.

Minutes of Meetings, November 14–16, 2018
 
The Board reviewed a preballot draft of an Exposure Draft of a proposed Implementation Guide, Fiduciary Activities, and provided suggestions for clarifying edits and the removal of Question 4.5. The Board did not object to preparing a ballot draft of an Exposure Draft of a proposed Implementation Guide.
 
Minutes of Meetings, October 2–4, 2018
 
The Board reviewed potential questions and answers related to an implementation guide for fiduciary activities, provided suggestions for clarifying edits, and tentatively did not object to the proposed questions and answers, as modified. The Board also did not object to moving forward with a preballot draft of a proposed Implementation Guide.  
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