In January 2017, the Governmental Accounting Standards Board (GASB) issued Statement No. 84 – Fiduciary Activities (“GASB 84” or "the standard"). GASB 84 is effective for fiscal years beginning after December 15, 2018. This standard establishes criteria for identifying fiduciary activities and reporting on those activities. Because of the wide-reaching nature of GASB 84, it is critical to develop a plan now to identify potential fiduciary activities and how to account for those activities.
The standard also requires custodial funds to present a statement of net position and a statement of changes (flows statement) and defines the manner in which liabilities of the funds are measured. Unlike agency funds, custodial funds may have a “net position,” since assets may not equal liabilities.
While the impact of GASB 84 may vary from one organization to another, there are several key aspects that could significantly affect your accounting, reporting, and budgets in the near future.
Since the standard is already effective, it's crucial to act upon any necessary changes as soon as possible.
It’s important to identify the types of funds or activities within your organization that could be considered fiduciary in nature. Consider the following:
Once the activities are identified, GASB provides a multi-step process for determining whether the activity is fiduciary or not. For those items determined to be fiduciary in nature, consideration must be given to internal controls, accounting and reporting. Ask the following:
Depending on the types and number of potential fiduciary activities, the above process could take some time to address. The standard is already effective, it's crucial to act upon any necessary changes as soon as possible.
While fiduciary activities are not a new concept, GASB 84 has many possible impacts. Our team can help by:
Contact us today to start a discussion about how GASB 84 may impact your organization.