Federal Accounting Standards Advisory Board

Accounting for Fiduciary Activities 

Statement of Federal Financial Accounting Standards 31 

24 October 2006 
 THE FEDERAL ACCOUNTING STANDARDS ADVISORY BOARD 

The Federal Accounting Standards Advisory Board (FASAB or "the Board") was established by 

the Secretary of the Treasury, the Director of the Office of Management and Budget (OMB), and 

the Comptroller General in October 1990. It is responsible for promulgating accounting standards 

for the United States Government. These standards are recognized as generally accepted 

accounting principles (GAAP) for the Federal Government. 

An accounting standard is typically formulated initially as a proposal after considering the 

financial and budgetary information needs of citizens (including the news media, state and local 

legislators, analysts from private firms, academe, and elsewhere), Congress, Federal executives, 

Federal program managers, and other users of Federal financial information. The proposed 

standard is published in an exposure draft for public comment. In some cases, a discussion 

memorandum, invitation for comment, or preliminary views document may be published before 

an exposure draft is published on a specific topic. A public hearing is sometimes held to receive 

oral comments in addition to written comments. The Board considers comments and decides 

whether to adopt the proposed standard with or without modification. After review by the three 

officials who sponsor FASAB, the Board publishes adopted standards in a Statement of Federal 

Financial Accounting Standards. The Board follows a similar process for Statements of Federal 

Financial Accounting Concepts, which guide the Board in developing accounting standards and 

formulating the framework for Federal accounting and reporting. 

Additional background information is available from the FASAB: 

 • "Memorandum of Understanding among the General Accounting Office, the Department 

of the Treasury, and the Office of Management and Budget, on Federal Government 

Accounting Standards and a Federal Accounting Standards Advisory Board." 

 • "Mission Statement: Federal Accounting Standards Advisory Board."

Federal Accounting Standards Advisory Board 

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Mailstop 6K17V 

Washington, DC 20548 

Telephone (202) 512-7350 

Fax (202) 512-7366 

www.fasab.gov

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Summary 2 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

 

Summary 

Scope of this Statement 

This statement defines “fiduciary activities” as those Federal Government 

activities that relate to the collection or receipt, and the subsequent management, 

protection, accounting, investment and disposition of cash or other assets in 

which non-Federal individuals or entities (“non-Federal parties”) have an 

ownership interest that the Federal Government must uphold. The fiduciary 

relationship must be based on statutory or other legal authority and the fiduciary 

activity must be in furtherance of that relationship. 

Reporting Requirements 

This statement requires Federal entities to distinguish the information relating to 

fiduciary activities of the Federal entity from all other activities of that Federal 

entity. Fiduciary assets will not be recognized on the balance sheet of any 

Federal entity. The Federal entity is required to include in its own audited financial 

statements a note disclosure providing the following information about its fiduciary 

activities: 

• An explanation of the nature of the fiduciary relationship, 

• A schedule of fiduciary net assets, and 

• A schedule of fiduciary activity. 

This requirement applies even if the Federal entity issues stand-alone audited 

financial statements for the fiduciary activity. For entities managing several 

distinct fiduciary activities, disaggregated information is required by activity. 

The Financial Report of the United States Government (FR) will include a note 

disclosure describing the nature of the fiduciary activities of the Federal 

Government. The FR note disclosure will provide a list of component entities 

responsible for fiduciary activities and the total amount of fiduciary net assets for 

each responsible component entity. The FR note disclosure will refer the reader 

to the component entity financial statements for additional information about each 

component’s fiduciary activity. 

Effective Date 

This statement is effective for periods beginning after September 30, 2008. Early 

adoption is not permitted. In the year this statement becomes effective, entities should 

not restate the prior period amounts presented in the basic financial statements and 

notes.
Table of Contents 3 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Table of Contents 

Summary ................................................................................................................................... 2

Introduction................................................................................................................................ 4

Accounting Standard.................................................................................................................. 6

Definition and Characteristics of Fiduciary Activities............................................................... 6

Basis of Accounting................................................................................................................ 8

Accounting and Reporting for Fiduciary Activities for Component Entities .............................. 9

Financial Report of the United States Government................................................................11

Effect on Current Standards ..................................................................................................11

Effective Date........................................................................................................................15

Appendix A: Basis for Conclusions............................................................................................16

Appendix B: Glossary................................................................................................................25

Appendix C: Examples of Fiduciary Note Disclosure.................................................................29

1. Example of Fiduciary Note Disclosure for Federal Component Entity ...............................29

2. Example of Note Disclosure for the Government-wide Financial Report ...........................31

2. Example of Note Disclosure for the Government-wide Financial Report ...........................31

Appendix D: Pro Forma Transactions .......................................................................................32

Appendix E: List of Abbreviations.............................................................................................40
Introduction 4 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Introduction 

1. This statement defines fiduciary activity1 and provides accounting and reporting 

guidance for fiduciary activities. Fiduciary activities should be distinguished from 

Federal programs designated as “trust funds” in the budget and in reporting to the 

Office of Management and Budget (OMB) and to the Treasury Financial 

Management Service (FMS). “Trust funds” included in the Federal budget are 

often established to carry out Federal programs, and their activity differs from the 

common understanding of trust fund activity outside of government. Most of the 

revenue received by Federal “trust funds” represents Government-owned 

collections “earmarked” or dedicated to finance or help to finance specific Federal 

programs rather than being held for the exclusive benefit of non-Federal parties. 

Non-fiduciary “trust funds” are addressed by Statement of Federal Financial 

Accounting Standards 27, Identifying and Reporting Earmarked Funds. This 

standard addresses activities that are fiduciary in nature. 

2. Fiduciary activities involve ownership interests described in this statement (see 

paragraph 10). The Federal employees’ Thrift Savings Fund and the Indian tribal 

and individual Indian trust funds are examples of fiduciary activities. 

3. In order to clarify financial reporting in general purpose Federal financial reports, 

this standard defines fiduciary activity and provides financial reporting guidance for 

fiduciary activity and for fiduciary assets and liabilities. 

4. This standard requires that the terms “fiduciary,” “fiduciary assets,” “fiduciary 

fund,” and “fiduciary activity” be used in general purpose Federal financial reports 

to characterize only fiduciary activity as defined in this standard. Non-fiduciary 

“trust fund” assets and activity related thereto should not be characterized as 

“fiduciary” or “trust” activity in general purpose financial reports of Federal entities. 

Such reporting would obscure an essential fact: that the Federal Government uses 

the non-fiduciary assets in support of its programs. 

5. This standard requires that Federal entities disclose fiduciary assets, liabilities and 

flows in a note disclosure. Fiduciary assets and liabilities should not be 

recognized on the balance sheet of the Federal entity. 

6. This standard also clarifies the definition and reporting for fiduciary cash that is on 

deposit in the U.S. Treasury. Fiduciary cash deposits are referred to as Fiduciary 

Fund Balance with Treasury (Fiduciary FBWT). This deposit activity is not fully 

addressed in Statement of Federal Financial Accounting Standards 1, Accounting 

for Selected Assets and Liabilities. SFFAS 1 explains that “in some 

circumstances, the entity deposits cash in its accounts in a fiduciary capacity for 

the U.S. Treasury or other entities.”2

 However, some unique aspects of Fiduciary 

 

1

Words first appearing in boldface are defined in Appendix B: Glossary 

2

 SFFAS 1, paragraph 29. 
Introduction 5 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

FBWT are not included in SFFAS 1. For example, SFFAS 1 defines FBWT as 

“the aggregate amount of funds in the entity’s accounts with Treasury for which 

the entity is authorized to make expenditures and pay liabilities.” SFFAS 1 further 

explains that “Fund Balance with Treasury is an intragovernmental item.” 

However, Fiduciary FBWT is not an intragovernmental item; the owner of 

Fiduciary FBWT is a non-Federal party. This standard amends SFFAS 1 to 

distinguish fiduciary FBWT from Federal component entities’ FBWT.

7. Numerous “fund groups”3

 are used in reporting to the Treasury FMS and the OMB. 

For example, “deposit funds” may be used for monies that do not belong to the 

Federal Government. Regardless of how a fund group may be classified in 

reporting to the Treasury FMS or to the OMB, only those activities that meet the 

definition of fiduciary activity promulgated in this standard are subject to the 

reporting requirements of this standard. Activities that do not meet the definition of 

fiduciary activities promulgated in this standard are not subject to the reporting 

requirements of this standard. Deposit funds that do not meet the definition of 

fiduciary activities, and therefore are not disclosed in the fiduciary note disclosure, 

should be recognized in the principal financial statements. 

Scope 

8. This statement provides financial reporting standards for fiduciary activities in the 

general purpose financial statements for Federal entities. The standard does not 

affect reporting in the Budget of the United States or special-purpose reports. 

Effective Date 

9. This standard is effective for periods beginning after September 30, 2008. In the 

initial year of implementation, comparative information should not be restated. 

Earlier adoption is prohibited. 

 

3

For a description of “fund groups” used in reporting to the Treasury FMS and the OMB, see the Treasury Financial Manual, 

Part 2, Chapter 1500. 
Accounting Standard 6 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Accounting Standard 

Definition and Characteristics of Fiduciary Activities 

Definition 

10. In a fiduciary activity a Federal entity collects or receives and subsequently 

manages, protects, accounts for, invests, and/or disposes of cash or other assets 

in which non-Federal individuals or entities (or “non-Federal parties”) have an 

ownership interest that the Federal Government must uphold. Non-Federal 

parties must have an ownership interest in cash or other assets held by the 

Federal entity under provision of law, regulation, or other fiduciary arrangement. 

The ownership interest must be enforceable against the Federal Government. 

Judicial remedies must be available for the breach of the fiduciary obligation. 

Characteristics 

11. Fiduciary activities are initiated by fiduciary collections. Fiduciary collections are 

an inflow to a Federal entity or its non-Federal designee (such as a commercial 

bank) of cash or other assets that are and remain the property of non-Federal 

parties. Fiduciary collections may be preceded by the recognition of fiduciary 

accounts receivable. 

12. Fiduciary activities may involve a variety of fiduciary assets, liabilities and 

transactions. Examples include but are not limited to: 

Cash: 

Fiduciary cash may be held in a variety of ways. Cash may be 

represented by balances on deposit with the U.S. Treasury4

 or 

commercial banks. 

Investments: 

Fiduciary assets may include investments in Treasury securities or in 

non-Treasury securities. 

Other Assets: 

Fiduciary assets may include assets other than cash, e.g., real or 

personal property held temporarily pending disposition, or held long-term 

in a fiduciary capacity. 

Liabilities: 

A fiduciary activity may include expenses that will be paid with fiduciary 

 

4

 The U.S. Treasury is in the Treasury Department, which is the primary fiscal agent for the Federal Government. The Treasury 

Department collects money due to the United States, makes payments, manages borrowings, performs central accounting 

functions, and produces coins and currency sufficient to meet demand. The Treasury Department manages the Government’s daily 

cash position and borrowing as well as the investment of funds in its custody. The Treasury Department provides Central 

Accounting System (CAS) services to Federal agencies. CAS transactions involve appropriation credits, transfers-in and -out, 

collections, disbursements and related adjustments. Such transactions increase or decrease Federal entities’ Fund Balance with 

Treasury (FBWT) maintained with the Treasury Department. 
Accounting Standard 7 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

assets. This may result in fiduciary liabilities that will be settled with 

fiduciary assets. 

Inflows: 

A fiduciary activity may include collections of cash or other assets that 

represent contributions from or for beneficiaries or revenue derived from 

fiduciary assets. 

Outflows: 

A fiduciary activity may include expenses that will be paid with fiduciary 

assets and distributions of assets to the beneficiaries. 

Exclusions 

13. The following are excluded from the reporting requirements for fiduciary activities, 

and should be recognized in the principal financial statements of the Federal 

component entity and not in the fiduciary note disclosure: 

• Amounts related to unpaid5 payroll withholdings and garnishments6

are excluded from the reporting requirements of this standard. Liabilities 

for unpaid payroll withholdings and garnishments should be recognized 

as accounts payable in accordance with existing standards.7

• Unearned revenue should not be reported as fiduciary activity and 

should be recognized as a liability in accordance with existing standards.8

 

Assets collected or received by a Federal entity that represent 

prepayments or advance payments for which the Federal component 

entity is expected to provide goods or services should not be classified as 

fiduciary activity. This exclusion applies broadly and applies to amounts a 

customer advances for orders that may be placed in the future or deposits 

made as part of a bid or settlement process, even if these amounts are 

not specifically classified as “unearned revenue” by the entity due to 

uncertainty about the ultimate realization of the revenue. 

14. Amounts related to operating revenues and expenses in ways that are consistent 

with the above exclusions also may be excluded. 

15. Seized property, including seized monetary instruments, is not subject to the 

reporting requirements for fiduciary activities because it does not meet the 

definition of a fiduciary activity. Seized assets, including seized monetary 

instruments, should continue to be reported in accordance with existing 

standards.9

 

5

“ Unpaid” means that amounts withheld or garnished have not been paid to the designated recipient of the amounts withheld or 

garnished. 

6

 Examples of garnishments include amounts withheld from an individual’s salary or tax refund for payments of child support or to 

another third party in compliance with a statute or court order. 

7 See SFFAS 1, Accounting for Selected Assets and Liabilities, paragraphs 74-86. 8

See SFFAS 1, paragraph 85 and SFFAS 7, Accounting for Revenue and Other Financing Sources, paragraph 37. 9

See SFFAS 3, Inventory and Related Property, paragraphs 61 and 69. 
Accounting Standard 8 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Basis of Accounting 

16. Fiduciary activities reported in the Federal entity’s notes to the financial 

statements, as required in paragraphs 17-24, should be disclosed in the required 

schedules and measured using the standards provided in generally accepted 

accounting principles.10 

 

10 For the definition of generally accepted accounting principles see the American Institute of Certified Pubic Accountants 

Professional Standards, U.S. Auditing Standards (AU) Section 411, ”The Meaning of Present Fairly in Conformity With Generally 

Accepted Accounting Principles.” 
Accounting Standard 9 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Accounting and Reporting for Fiduciary Activities for Component Entities 

Reporting of Fiduciary Activities 

17. Reporting on fiduciary activities is required in two notes to the financial 

statements. The note disclosing significant accounting policies11 should include, 

at a minimum, a statement that: “Fiduciary assets are not assets of the [Federal 

component entity] and are not recognized on the balance sheet. See Note xx, 

Fiduciary Activities.” 

18. A separate note to the financial statements should include the following 

information for individual fiduciary activities: 

a. A description of the fiduciary relationship, e.g., the applicable legal 

authority, the objectives of the fiduciary activity, and a general description 

of the beneficial owners or class of owners. 

b. A Schedule of Fiduciary Activity displaying, for all periods presented: 

• The beginning balance of net assets, 

• The inflows from the fiduciary activities by category (e.g., 

contributions, investment earnings) and outflows by category (e.g., 

benefit payments, refunds, administrative expenses), 

• The change in net assets, and 

• The ending balance of net assets. 

c. A Schedule of Fiduciary Net Assets displaying the current and prior period 

ending balances of cash and any other assets by category (e.g., 

receivables, investments), and liabilities by category (e.g., accounts 

payable, refunds payable), and a variance analysis addressing significant 

changes from the prior period. The disclosure for non-monetary fiduciary 

assets should include a description of the composition of the assets, the 

method(s) of valuation, and changes (if any) from prior period accounting 

methods. 

d. Component entities also may have non-valued fiduciary assets. Nonvalued fiduciary assets are fiduciary assets for which required disclosure 

does not include dollar values. Non-valued fiduciary assets may include 

land held in trust. Component entities holding non-valued fiduciary assets 

should disclose them in a Schedule of Changes in Non-Valued Fiduciary 

Assets, which should include a description of non-valued fiduciary assets, 

beginning quantity, quantity received, quantity disposed of, net 

increase/decrease in non-valued fiduciary assets, and ending total 

quantity. 

e. If separate audited financial statements are issued for an individual 

fiduciary activity, additional disclosures listed in paragraph 22 should be 

provided. If the separate audited financial statements for an individual 

fiduciary activity are prepared with a fiscal year-end other than 

 

11 A note disclosing “Significant Accounting Policies” is a requirement of the Office of Management and Budget (OMB). This 

disclosure is currently listed as Note 1 in “Form and Content of the Performance and Accountability Report” issued as Part A of

OMB Circular A-136.
Accounting Standard 10 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

September 30, the information required in this paragraph may be 

provided for the fiduciary activity’s most recent fiscal year, provided that 

the information is clearly labeled. 

19. Most fiduciary activities are disclosed by the Federal component entity 

responsible for administering the fiduciary activity on behalf of the beneficiaries. 

If more than one Federal component entity is responsible for administering a 

fiduciary activity, and the separate portions of the activity can be clearly identified 

with a responsible component entity, then each component entity should disclose 

its portion in accordance with the requirements of this standard. In such cases, 

each component entity should identify the other component entities that are 

involved in managing the activity. If separate portions cannot be identified, the 

component entity with program management responsibility should disclose the 

fiduciary activity.12

20. For component entities with several distinct fiduciary activities, summary financial 

information required in paragraph 18 should be provided for each fiduciary 

activity presented individually. Information for fiduciary activities not presented 

individually (see paragraph 21) may be aggregated. 

21. Selecting fiduciary activities to be presented individually requires judgment. The 

preparer should consider both quantitative and qualitative criteria. Acceptable 

criteria include but are not limited to: quantitative factors such as the percentage 

of the reporting entity’s fiduciary net assets or inflows; and qualitative factors 

such as whether a fiduciary activity is of immediate concern to beneficiaries, 

whether it is politically sensitive or controversial, whether it is accumulating large 

balances, or whether the information provided in the fiduciary note disclosure 

would be the primary source of financial information for the public. 

22. If separate audited financial statements are issued for an individual fiduciary 

activity that is presented individually in accordance with the criteria described in 

the preceding paragraph, 

(a) The fiduciary note should disclose the basis of accounting used and 

auditor’s opinion on the current or most recent financial statements. If the 

auditor’s opinion was not unqualified, the fiduciary note also should 

disclose the reason(s) stated by the auditors and refer the reader to the 

audit opinion for further information. 

(b) The note disclosure should provide information on how the reader can 

obtain a copy of the financial statements and the audit opinion thereon. 

23. In the initial year of implementation, prior year information should not be 

displayed. In the reporting periods following the initial year of implementation, 

prior period amounts should be displayed. 

 

12 To determine program management responsibility, Federal component entities should consider the legislation authorizing the 

activity; the Memorandum of Understanding that establishes responsibilities; and the provisions of SFFAC 2, Entity and Display.
Accounting Standard 11 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

24. Notes to the financial statements are an integral part of the basic financial 

statements, essential for complete and fair presentation in conformity with 

generally accepted accounting principles for the Federal Government. 

Financial Report of the United States Government 

25. Reporting on fiduciary activities is required in two notes to the financial 

statements. The note disclosing significant accounting policies13 should include, 

at a minimum, a statement that: “Fiduciary assets are not assets of the Federal 

Government and are not recognized on the balance sheet of the U.S. 

Government. See Note xx, Fiduciary Activities.” 

26. In the consolidation process, a distinction must be made between Federal 

component entities’ Fund Balance with Treasury (FBWT) recognized on the 

balance sheet at the component entity level and the FBWT attributable to 

fiduciary activities (fiduciary FBWT) reported by Federal component entities in a 

note disclosure. The liability for fiduciary cash held as FBWT should be 

recognized as a liability on the Government-wide balance sheet. The liability for 

fiduciary investments in Treasury securities should be recognized on the 

Government-wide balance sheet as debt held by the public. 

27. The fiduciary note disclosure should include a definition of fiduciary activities, a 

description of the nature of the Federal Government’s fiduciary activities, a list of 

component entities responsible for fiduciary assets, and the total amount of 

fiduciary net assets for each responsible component entity. Aggregation of 

component entities with immaterial amounts of fiduciary net assets is permitted. 

28. In the initial year of implementation, prior year information should not be 

displayed. In the reporting periods following the initial year of implementation, 

prior period amounts should be displayed. 

29. The note disclosure should refer the reader to component entity financial 

statements for additional information. 

30. Notes to the financial statements are an integral part of the basic financial 

statements, essential for complete and fair presentation in conformity with 

generally accepted accounting principles for the Federal Government. 

Effect on Current Standards 

 

13 A note disclosing “Significant Accounting Policies” is a requirement of the Office of Management and Budget (OMB). This 

disclosure is currently listed as Note 1 in “Form and Content of the Performance and Accountability Report issued as Part A of OMB 

Circular A-136.
Accounting Standard 12 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

31. This standard affects current standards for reporting non-entity assets. 

Paragraphs 26 and 29 of SFFAS 1, Accounting for Selected Assets and 

Liabilities, are amended as follows: 

[26] Both entity assets and non-entity assets under an entity’s custody 

or management should be reported in the entity’s financial statements, 

except for non-entity assets meeting the definition of fiduciary 

assets, which should not be recognized on the balance sheet, but 

should be disclosed in accordance with the provisions of 

SFFAS 31, Accounting for Fiduciary Activities. Non-entity assets 

reported in recognized on an entity’s financial statementsbalance 

sheet should be segregated from entity assets. An amount equal to 

non-entity assets recognized on the balance sheet should be 

recognized as a liability (due to Treasury or other entities) in the entity’s 

financial statements. 

[29] Non-entity cash. Non-entity cash is cash that a federal entity 

collects and holds on behalf of the U.S. Government or other entities. In 

some circumstances, the entity deposits cash in its accounts in a 

fiduciary custodial capacity for the U.S. Treasury or other federal 

component entities, or in a fiduciary capacity for non-federal 

parties.

(a) Non-entity cash recognized on the balance sheet should be 

reported separately from entity cash. 

(b) Non-entity cash meeting the definition of a fiduciary asset

should not be recognized on the balance sheet, but should 

be disclosed in accordance with the provisions of SFFAS 31, 

Accounting for Fiduciary Activities.

32. This standard affects current standards that define Fund Balance with Treasury. 

Paragraph 31 of SFFAS 1 is amended as follows: 

[31] A federal entity’s fund balance with the Treasury (FBWT) is the 

aggregate amount of funds in the entity’s accounts with Treasury for 

which the entity is authorized to make expenditures and pay liabilities. 

Fund balance with Treasury FBWT is an intragovernmental item, except 

for fiduciary or other non-federal non-entity FBWT. From the reporting 

entity’s perspective, the reporting entity’s a fund balance with Treasury

FBWT is an asset because it represents the entity’s claim to the federal 

government’s resources. However, from the perspective of the federal 

government as a whole, it is not an asset; and while it represents a 

commitment to make resources available to federal departments, 

agencies, programs and other entities, it is not a liability. In contrast, 

fiduciary and other non-federal non-entity FBWT is not 

intragovernmental, and it represents a liability of the appropriate 

Treasury component and of the federal government as a whole to 

the non-federal beneficiaries.
Accounting Standard 13 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

33. Paragraphs 37 and 38 of SFFAS 1 are amended, and a new paragraph is added, 

as follows: 

[37] Disclosure should be made to distinguish two three categories of 

funds within the entity’s fund balance with Treasury FBWT reported on 

the entity’s balance sheet: the obligated balance not yet disbursed, and

the unobligated balance, and non-budgetary FBWT. The obligated 

balance not yet disbursed is the amount of funds against which budgetary 

obligations have been incurred, but disbursements have not been made. 

[38] The unobligated balance is the amount of funds available to an entity 

against which no claims have been recorded. Unobligated balances are 

generally available to a federal entity for specific purposes stipulated by 

law. Unobligated balances may also include balances in 

expired/canceled accounts that are available only for approved 

adjustments to prior obligations. Certain unobligated balances may be 

restricted to future use and are not apportioned for current use. 

Disclosure should be provided on such restrictions. Non-budgetary 

FBWT includes unavailable receipt accounts, clearing accounts and 

other accounts that do not represent budget authority, as well as 

non-entity FBWT that is recognized on the balance sheet. 

[New Paragraph] In addition to entity and non-entity FBWT that is 

recognized on the balance sheet, a federal entity may also 

administer fiduciary FBWT on behalf of non-federal entities or 

individuals. Fiduciary FBWT is not recognized on the balance sheet, 

but is subject to separate disclosure requirements. For disclosure 

requirements for fiduciary FBWT, see SFFAS 31, Accounting for

Fiduciary Activities. 

34. This standard affects current standards dealing with fiduciary activity and 

fiduciary relationships in SFFAS 7, Accounting for Revenue and Other Financing 

Sources. Paragraphs 83-87 and 370 of SFFAS 7 are rescinded. In addition, 

paragraphs 142 and 276 of SFFAS 7 are amended as follows: 

[142] MMS collects this revenue acting as an agent for and distributes 

it to the recipients designated by law: the Treasury, certain entities within 

the Government to which amounts are earmarked, the states, and Indian 

tribes and allottees. Therefore, MMS should account for the exchange 

revenue it collects as an agent for the U.S. Treasury or other federal 

component entities as a custodial activity, which is an amount collected 

or to be collected for others federal entities, in the same way as the 

Internal Revenue Service accounts for the nonexchange revenue that it 

collects. MMS collection activity for non-federal entities may meet the 

definition of fiduciary activity and, if so, should be accounted for in 

accordance with the requirements of SFFAS 31, Accounting for 
Accounting Standard 14 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Fiduciary Activities. Because the revenue collected by MMS is exchange 

revenue, it should be recognized and measured under the exchange 

revenue standards when the rents, royalties, and bonuses are due 

pursuant to the contractual agreements. 

[276] MMS should instead account for the exchange revenue as a 

custodial activity. MMS collects rents, royalties, and bonuses acting as 

an agent on behalf of and distributes the collections to the recipients 

designated by law: the General Fund, certain entities within the 

Government to which amounts are earmarked, the states, and Indian tribes 

and Allottees. MMS collection activity for non-federal entities may 

meet the definition of fiduciary activity and, if so, should be 

accounted for in accordance with the requirements of SFFAS 31, 

Accounting for Fiduciary Activities. The amounts of revenue should be 

recognized and measured under the exchange revenue standards when 

they are due pursuant to the contractual agreement. 

35. This standard also amends paragraphs 84 and 102 of SFFAC 2, Entity and 

Display, as follows: 

[84] The elements most likely to be presented in the balance sheet of a 

Federal suborganization/organization, program, or the entire government 

would be as follows: 

• Fund Balance with Treasury. This represents the amount in the 

entity’s accounts with the U.S. Treasury that is available only for 

the purpose for which the funds were appropriated. It would may

also include balances held by the entity in the capacity of a banker 

or agent for others. However, Fund Balance with Treasury 

(FBWT) meeting the definition of fiduciary FBWT should not 

be recognized on the balance sheet, but should be disclosed 

in accordance with the provisions of SFFAS 31, Accounting 

for Fiduciary Activities. This classification would not be included 

in the financial statements of the U.S. Government.)

[102] Custodial collections do not include deposit funds, i.e., amounts held 

temporarily by the government (e.g., bidders’ earnest money or 

guarantees for performance) or amounts held by the Government as an 

agent for others, (e.g., state income taxes withheld from Federal 

employees’ salaries that are to be transferred to the states.). Both of

tThese types of collections can be considered assets and liabilities until 

they are returned to the depositor or forwarded to the organization entitled 

to the funds should be reported in accordance with the provisions of 

SFFAS 31, Accounting for Fiduciary Activities.

36. Interpretation No. 1, Reporting on Indian Trust Funds in General Purpose 

Financial Reports of the Department of the Interior and in the Consolidated 

Financial Statements of the United States Government: An Interpretation of 

SFFAS 7, is rescinded. 
Accounting Standard 15 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Effective Date 

37. This standard is effective for periods beginning after September 30, 2008. In the 

initial year of implementation, comparative information should not be restated. 

Earlier adoption is prohibited. 

The provisions of this statement need not be applied to immaterial items. 
Appendix A: Basis for Conclusions 16 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Appendix A: Basis for Conclusions 

This appendix discusses some factors considered significant by the Board in reaching the 

conclusions in this standard. It includes the reasons for accepting certain approaches and 

rejecting others. Some factors were given greater weight than other factors. 

The guidance enunciated in the standards - not the material in this or other appendices - should 

govern the accounting for specific transactions, events or conditions. 

 Outreach activities

38. FASAB published the revised14 exposure draft (ED), Accounting for Fiduciary 

Activities, on June 27, 2005. Upon release of the ED, notices and/or press 

releases were provided to: the Federal Register; the FASAB News, the Journal of 

Accountancy, AGA Today, the CPA Journal, Government Executive, the CPA 

Letter, Government Accounting and Auditing Update, the CFO Council, the 

Financial Statement Audit Network, the Federal Financial Managers Council, and 

committees of professional associations generally commenting on exposure 

drafts in the past. Copies of the ED and letters requesting comments were also 

sent to individuals who spoke at the October 2003 public hearing for the original 

ED, as well as to the Federal Retirement Thrift Investment Board. 

39. During the comment period, FASAB staff also gave informational presentations 

at the 15th Annual Government Financial Management Conference sponsored by 

Treasury Agency Services, and at July 2005 meetings of the Financial Statement 

Audit Network, the OMB Form and Content Work Group, the Greater Washington 

Society of CPAs, and the U.S. Standard General Ledger Board’s Issues 

Resolution Committee. A public hearing was also held on August 17, 2005. 

Comments Received 

40. The Board did not rely on the number in favor of or opposed to a given position. 

Information about the respondents’ majority view is provided only as a means of 

summarizing the comments. The Board considered the arguments in each 

response and weighed the merits of the points raised. The respondents’ 

comments are summarized below. 

41. Fourteen written responses were received from the following sources: 

Comment letters and/or oral 

testimony provided by: 

Federal 

(Internal)

Non-Federal 

(External) 

Users, academics, others 3 

Auditors 3 

Preparers and financial managers 8 

42. Note: The response from one Federal agency’s Office of the Inspector General 

listed above under “auditors,” noted that the response represented the 

 

14 The first exposure draft was issued on April 23, 2003. Issues raised by respondents to that exposure draft caused the Board to

revise its proposal. 
Appendix A: Basis for Conclusions 17 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

consensus expressed by the agency’s Office of the Chief Financial Officer as 

well as the agency’s auditors.. 

43. Also, one Federal agency wrote that it had no comments because the agency’s 

funds are primarily earmarked funds rather than fiduciary. 

44. At the public hearing held on August 17, 2005, representatives from two Federal 

agencies provided oral statements and answered questions from the Board. 

Summary of Comments 

45. The majority of respondents agreed with the definition of fiduciary activities, the 

proposed reporting requirements, and the exclusions from the reporting 

requirements. Other issues raised by respondents included how to report on 

fiduciary activities that issue separate audited financial statements; the 

ownership interest(s) for seized assets; the appropriate basis of accounting for 

fiduciary activities and the effective date of the standard. 

Definition 

46. The Board believes that the substance of a transaction, rather than its form, 

should be the determining factor in how it is reported. Accordingly, this standard 

provides a definition and characteristics for fiduciary activity and does not provide 

lists of specific funds or fund groups. Some respondents have noted that often 

fiduciary activities are managed through the establishment of a deposit fund. 

Therefore, the following section is intended to assist Federal financial managers 

in understanding the role of deposit funds. 

The Role of Deposit Funds 

47. Federal component entities report budgetary and proprietary transactions to the 

OMB and the Treasury FMS using “fund account symbols,” which are subcomponents of Federal reporting entities. Fund account symbols are assigned 

by the Treasury FMS in collaboration with the OMB. Based upon certain 

characteristics, fund account symbols are classified into “fund groups.” For 

example, “deposit funds” are a fund group for monies that do not belong to the 

Federal Government.15 The OMB classifies deposit funds as non-budgetary 

activities and excludes deposit funds from the Federal budget.16 Within the 

“deposit fund” group established by the Treasury FMS, there are three distinct 

types: (a) monies withheld from Government payments for goods and services 

received, including payroll withholdings and garnishments; (b) monies the 

Government is holding awaiting distribution based on a legal determination or 

investigation; and (c) deposits received from outside sources for which the 

Government is acting solely as a banker, fiscal agent or custodian.17 Although 

some fiduciary activities may be recorded and reported in deposit funds, the use 

of a deposit fund for an activity does not automatically indicate that the activity 

 

15 Treasury Financial Manual (TFM) Volume 1, Part 2, Section 1535, available on the Internet at 

http://www.fms.treas.gov/tfm/vol1/index.html 16 See FY 2006 U.S. Budget, Analytical Perspectives, pp. 372, 377 and 378-379. 17 TFM, Section 1535. 
Appendix A: Basis for Conclusions 18 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

meets the definition of fiduciary in this standard. The activity in each deposit fund 

should be reviewed to determine whether it meets the definition and 

characteristics of a fiduciary activity in this standard. Also, if an activity is not 

reported in a deposit fund, that fact does not necessarily mean that the activity 

does not meet the definition of fiduciary in this standard. Each activity must be 

evaluated based upon whether or not it meets the definition of a fiduciary activity 

in this standard. 

Exclusions 

48. Payroll withholdings and garnishments appear to meet the definition of fiduciary 

activities. When an employer withholds an amount from an employee’s wages, 

the employer has a responsibility to forward those amounts to the required 

recipient. However, this standard excludes payroll withholdings and 

garnishments from the reporting requirements for fiduciary activities because 

payroll withholdings and garnishments are similar to other unpaid costs of 

operations and do not warrant special reporting. Because of the routine 

operational nature and short duration of the activity, the Board does not believe 

that fiduciary reporting of payroll withholdings and garnishments would produce 

useful information. 

49. Similarly, Federal component entities may hold advances received from 

customers for future sales of goods or services. Such advances represent 

unearned revenue. One Federal agency, in its written response and oral 

testimony, noted that certain advances received appear to meet the definition of 

fiduciary activity. However, this standard excludes unearned revenue from the 

fiduciary reporting requirements because unearned revenue is a routine 

operational activity and the Board believes that fiduciary reporting of unearned 

revenue is not warranted. 

50. The standard clarifies the fact that seized property is not subject to the fiduciary 

reporting requirements because seized assets do not meet the definition of 

fiduciary activities. In seizure-for-forfeiture the Government is asserting its right 

to the property, and is taking action to eliminate, rather than to uphold, the 

ownership interest of the non-Federal party. 

Reporting Standards 

51. The Board discussed the implications of recognizing fiduciary assets on the 

balance sheet or on a separate principal statement. The Board considered 

whether recognizing fiduciary assets on the balance sheet might imply not only 

managerial control over the assets, but also that the benefit of the assets accrue 

to the Federal component entity. The Board decided that fiduciary assets should 

not be recognized on the balance sheet of the Federal component entity because 

they are not assets of either the Federal component entity or the Federal 

Government as a whole. The Board considered whether fiduciary activity should 

be recognized in a separate principal financial statement, but decided that a note 

disclosure would be preferable, provided that the note disclosure contains 

adequate information regarding fiduciary assets and activities. 
Appendix A: Basis for Conclusions 19 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Basis of Accounting 

52. Some members of the Board have dissented to the standard and their reasons 

are presented at paragraph 63. These members oppose requiring the disclosures 

to be measured in accordance with generally accepted accounting principles. 

Two reasons are offered in the written dissent. 

53. Some of the members dissenting stated that the Board should not impose 

requirements on reporting information related to “non-Federal entities.” However, 

a majority of the Board believe that fiduciary activities as defined in this standard 

are Federal program activities, carried out by Federal employees often with 

federal funding of administrative expenses. The amount and sources of financing 

fiduciary activities are determined by Congress. The assenting Board ;members 

believe that although the assets in fiduciary funds are non-federal assets, the 

responsibility for managing the assets is a federal responsibility and the funds 

holding the assets are federal accounting entities established to carry out that 

responsibility. 

54. A major objective of general purpose financial reporting in accordance with 

generally accepted accounting principles is to meet the needs of users who have 

limited access to internal documents or statements and lack the ability to demand 

that desired information be provided. Most citizens and beneficiaries of fiduciary 

funds lack such ability. 

55. Some of the members dissenting stated that the cost-benefit of the requirement 

to disclose information in conformity with generally accepted accounting 

principles has not been demonstrated. However, a majority of the Board 

believes that the need for accountability by public officials is sufficient in its own 

right to justify the requirement to conform to generally accepted accounting 

principles. Further, the Board notes that: 

a.Current standards (SFFAS 7, paragraphs 83-87) already require accrual 

accounting for fiduciary activities; therefore, this standard is merely carrying 

forward existing requirements and is not introducing new costs. 

b. This standard requires the same basis of accounting that is required for 

Federal assets, liabilities and flows. Accounting systems on that basis are 

routinely in operation throughout the government and pose no unusual costs for 

fiduciary activities. 

c. The Board is permitting generally accepted accounting principles for any 

domain (FASAB, Governmental Accounting Standards Board, or Financial 

Accounting Standards Board) to be used. This should mitigate any costs for 

fiduciary activities currently reporting with a different source of generally 

accepted accounting principles. 
Appendix A: Basis for Conclusions 20 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

d. The Board is permitting the use of information based on a fiscal year-end other 

than the fiscal year-end used by the Federal Government. This will mitigate the 

cost for fiduciary activities currently producing audited financial statements on a 

different fiscal year. 

Custodial Activity Differs from Fiduciary Activity 

56. The Statement of Custodial Activity is not amended by this standard. The 

Statement of Custodial Activity is appropriate for custodial collections, which are 

amounts collected by one Federal component entity on behalf of another Federal 

component entity and associated with that other entity in the Federal budget. For 

example, the Internal Revenue Service (IRS) and the Bureau of Customs and 

Border Protection (Customs) make collections of income taxes and customs 

duties, respectively, and they are deposited into designated accounts of the 

Treasury, which are unavailable to either for use in their operations.18 The IRS 

and Customs would report such collections on a Statement of Custodial Activity 

and the responsible program entity would recognize revenue and the related 

assets. Thus, the Statement of Custodial Activity is appropriate for those Federal 

component entities whose primary mission is collecting taxes or other Federal 

revenues, particularly sovereign revenues that are intended to finance the entire 

Government's operation, or at least the programs of other Federal component 

entities, rather than their own activities.19 Guidance with respect to the 

Statement of Custodial Activity is provided in Statement of Federal Financial 

Accounting Concepts (SFFAC) 2 and SFFAS 7. 

57. Reporting requirements for fiduciary activities are different from reporting 

requirements for custodial activities. Although the inflows and assets reported on 

the Statement of Custodial Activity are not inflows or assets of the Federal 

component entity, they are inflows and assets of the Federal Government as a 

whole. In contrast, fiduciary inflows and assets are not inflows of net assets to 

the Federal Government. Accordingly, fiduciary activities are disclosed in a note 

and are not recognized on the Statement of Custodial Activity or any other 

principal financial statement. 

58. Because fiduciary assets are not recognized on the balance sheet of the 

reporting entity, there is no offsetting liability, as there is for custodial assets. 

The fiduciary note discloses the beneficiaries’ equity as “fiduciary net assets.” 

Effective Date

59. This standard requires that fiduciary assets and liabilities be disclosed in a note, 

and should not be recognized on the face of the balance sheet. In order to 

 

18 Implementation Guide to Statement of Financing in Statement of Federal Financial Accounting Standards 7, Accounting for 

Revenue and Other Financing Sources: Detailed Information on the Statement of Financing, par. 25. 19 SFFAC 2, par. 101. 
Appendix A: Basis for Conclusions 21 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

facilitate the preparation of the Financial Report of the U.S. Government, a 

uniform implementation date for all Federal component entities is necessary. 

Accordingly, early implementation of this standard is prohibited, and Federal 

component entities should not restate prior periods in the initial year of 

implementation. The effective date is intended to allow Federal agencies 

adequate time to comply with the reporting requirements. 

Effect on Existing Standards 

60. The Board promulgates standards for activities that are defined by specific 

characteristics, and not by how an activity may be labeled in the budget or 

reported to the Treasury Financial Management Service. Paragraph 370 of 

SFFAS 7 addressed the group of funds designated as “deposit funds” as follows: 

[370] Deposit funds are accounts outside the budget that 

record amounts that the Government (a) holds temporarily 

until ownership is determined or (b) holds as an agent for 

others. The standards and guidance in this Statement do not 

apply to deposit funds except insofar as a particular deposit 

fund may be classified as part of a Federal reporting entity or a 

disclosure may be required due to a fiduciary relationship on 

the part of a Federal reporting entity toward a deposit fund. 

61. The Board decided that this paragraph was not sufficiently clear that all deposit 

funds that are not disclosed in the fiduciary note should be recognized in the 

principal financial statements of the Federal component entity. Accordingly, 

paragraph 370 of SFFAS 7 is rescinded by this standard and an explanatory 

sentence was added to paragraph 7 in the introduction section of this standard. 

All deposit funds that do not meet the definition of fiduciary activities and 

therefore are not disclosed in the fiduciary note must be recognized on the face 

of the financial statements. 

Board Approval 

62. This statement was approved by the Board with a vote of six members in favor of 

its issuance and four members, Messrs. Dacey, Patton, Reid and Zavada, 

opposing its issuance. 

Dissents 

63. Messrs. Dacey, Patton, Reid and Zavada dissented to this standard. Their 

dissent is presented below. Some members who voted to issue the standard 

agree with certain of the arguments posed by the dissenters but believe that, on 

balance, the standard is an improvement in Federal financial reporting. 
Appendix A: Basis for Conclusions 22 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Dissent of Messrs. Dacey, Patton, Reid and Zavada 

63. Paragraph 16 of the proposed standard requires that information disclosed about 

fiduciary activities be presented on the basis of generally accepted accounting 

principles. Board members Robert Dacey, James Patton, Robert Reid, and 

David Zavada support disclosure of information on fiduciary activities, but 

disagree with this requirement. These members believe that, at a minimum, the 

words “and measured using the standards provided in generally accepted 

accounting principles” should be deleted from paragraph 16 and replaced with 

words such as “and measured on the basis of accounting used to maintain or 

report the information.” While these members do not disagree that generally 

accepted accounting principles (GAAP) financial reporting enhances the quality 

of reported financial information, they nonetheless disagree that the Board 

should require information related to fiduciary activities to be presented on a 

GAAP basis. The reasons for these views and the members supporting each of 

these reasons are as follows: 

The Board Should Not Impose Requirements on Reporting Information Related 

to Non-Federal Entities 

64. Board members James Patton and Robert Reid believe that the Board should not 

impose requirements on reporting information related to non-Federal entities, 

including the basis of accounting to be used in disclosures related to such nonFederal entities. Fiduciary activities, as defined in the proposed standard, 

represent activities of non-Federal entities. All entities are obligated to choose 

the basis of accounting that will be used to prepare financial information and 

whether such information will be audited, consistent with any legal and regulatory 

requirements. In some known instances and likely in others, information related 

to these non-Federal entities is not maintained or reported on a GAAP basis 

and/or are not audited. 

65. Other organizations are positioned to require the basis of accounting to be used 

by the non-Federal entities that represent fiduciary activities to the Federal 

government, as well as require the information to be audited. The 

beneficiaries/owners that have an interest in the non-Federal entities’ activities 

and oversight bodies that represent them and the respective Federal entities are 

best positioned to determine the basis of accounting and reporting and audit 

assurance that best meets their needs. For example, the beneficiaries/owners of 

the non-Federal entities may have agreements in place covering the basis of 

accounting used or the audit assurance to be provided. In addition, the basis of 

reporting and audit assurance can be determined by the courts, by statute or by 

policy. 

66. In summary, the Board should not mandate disclosure of financial information on 

a basis of accounting that is different from the basis used to maintain or report 

information related to these non-Federal entities nor require that such information 

be audited on an individual fiduciary activity basis. However, as part of the 

current Federal entity project, the Board can reconsider whether certain or all 

entities representing fiduciary activities should be considered to be Federal 

entities, and therefore be required to follow Federal GAAP and be audited. 
Appendix A: Basis for Conclusions 23 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

The Cost-Benefit of the Requirement Has Not Been Demonstrated

67. Board members Robert Dacey, Robert Reid, and David Zavada do not believe 

that it has been demonstrated that the requirement to disclose information in 

conformity with GAAP is cost-beneficial (i.e., benefits clearly exceed the 

additional costs that would be incurred.) As noted above, in some known 

instances and likely in others, information related to non-Federal entities that 

represent fiduciary activities to the Federal Government is not maintained or 

reported on a GAAP basis and/or are not audited. 

68. In their response to the exposure draft, the Department of the Interior indicated 

that they were maintaining the Indian Trust Fund information on a basis of 

accounting that was consistent with trust activity of commercial banks and 

institutions and they questioned the benefit of converting the information to a 

Federal GAAP basis of accounting. 

69. Requiring the Federal entities to report financial information on these nonFederal entities in their footnotes on a GAAP basis will incur additional costs, 

which could be substantial. Furthermore, requiring such disclosure will not 

require the non-Federal entity to maintain or report financial information on a 

GAAP basis of accounting. Financial information disclosed in the Federal entity 

financial statements that is different from information provided to fiduciary 

owners/beneficiaries and oversight bodies could result in confusion. Such 

confusion further decreases the benefit of the requirement to report fiduciary 

activities on a GAAP basis. 

70. The disclosure of fiduciary activities in Federal financial statements is not 

designed to be the primary source of information to owners/beneficiaries of these 

non-Federal entities. Rather, such beneficiaries should receive information 

directly from the non-Federal entity or related Federal entity. In the case of the 

larger fiduciary activities, such information is provided or available, both at an 

aggregate and individual account holder level. 

71. A primary purpose of disclosing fiduciary activities in a Federal entity’s financial 

statements is to demonstrate the nature and extent of the Federal Government’s 

fiduciary responsibilities and whether the Federal entity is adequately carrying 

out its fiduciary responsibilities. Therefore, disclosure of (1) information prepared 

on the basis of accounting used to maintain or report the financial information to 

beneficiaries/oversight bodies, (2) the basis of accounting used (including 

whether or not it was prepared on a Federal GAAP basis), (3) whether the 

information was audited, and (4) the type of opinion issued, provides sufficient 

information that users and oversight bodies (e.g., Congress, OMB) may use to 

determine the adequacy of Federal actions to discharge their fiduciary 

responsibilities. It has not been demonstrated that incurring additional costs to 

develop disclosures beyond these would provide significant benefits relative to 

the additional costs. 

72. The nature and extent of all fiduciary activities have not been identified nor have 

the related costs to meet the requirements of the proposed standard. In addition 

to the major fiduciary activities discussed by the Board, there may be many other 
Appendix A: Basis for Conclusions 24 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

fiduciary activities for which Federal GAAP-based information is not maintained 

or reported and/or are not audited. Also, the cost of developing accrual-based 

information, if available, is unknown. In addition, an Interior official indicated that 

certain accruals, such as for royalties on the thousands of oil and gas leases held 

and for timber sales on behalf of the Indian trust funds are not readily 

determinable, and if estimated, would not be reliable. Therefore the relative 

magnitude of the ultimate cost of adopting this requirement is not known. 

73. While a precise estimate of costs and a formal cost benefit analysis is not 

expected, the Board should consider the relative magnitude of costs before 

deciding whether a standard is cost beneficial. As part of this consideration, the 

Board should also consider the expected utility of the requirement (a disclosure 

in this instance), and alternatives for achieving the related objectives. In this 

instance, it has not been clearly demonstrated that the increased benefits exceed 

the related costs. 
Appendix B: Glossary 25 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Appendix B: Glossary 

Beneficiary – An individual or other entity legally entitled to enforce an obligation against the 

United States such as specified benefits from a fiduciary trust or agent fund. 

Component Entity – The term “component entity” is used to distinguish between the U.S. 

Federal Government and its components. The U.S. Federal Government as a whole is 

composed of organizations that manage resources and are responsible for operations, i.e., 

delivering services. These include departments and independent agencies, which are generally 

divided into organizational units with a wide variety of titles, including bureaus, administrations, 

agencies, and corporations. Use of “component entity” in this standard is only intended to 

distinguish between the Financial Report of the United States Government’s consolidated 

financial statements and financial statements of its components. Also see “Entity.” 

Deposit Fund – Treasury Financial Management Service establishes deposit fund accounts to 

record monies that do not belong to the Federal government. A description of deposit fund 

criteria may be found in the Treasury Financial Manual, Section 1535, “Deposit Fund Accounts.” 

Disclosure – Displaying information in notes or narrative regarded as an integral part of the 

basic financial statements. 

Entity – The U.S. Federal Government as a whole and/or units within the Federal Government, 

such as a department, agency, bureau, or program, for which a set of financial statements 

would be prepared. Entity also encompasses a group of related or unrelated commercial 

functions, revolving funds, “trust funds,” and/or other accounts for which financial statements will 

be prepared in accordance with OMB guidance. Also see “Component Entity.” 

Exchange Revenue – Inflows of resources to a Government entity that the entity has earned. 

They arise from exchange transactions, which occur when each party to the transaction 

sacrifices value and receives value in return. 

 

Fiduciary – (noun) In this standard, a Federal entity that holds assets in trust for non-Federal 

parties in which the non-Federal parties have an ownership interest that the Federal 

Government must uphold. 

 (adjective) In this standard, relating to the process of the collection or receipt, and 

the management, protection, accounting, investment and disposition by the Federal 

Government of cash or other assets in which non-Federal individuals or entities have an 

ownership interest that the Federal Government must uphold. 

Fiduciary Activity – An activity that relates to the collection or receipt, and the management, 

protection, accounting, investment and disposition by the Federal Government of cash or other 

assets in which non-Federal individuals or entities have an ownership interest that the Federal 

Government must uphold. Non-Federal parties must have an ownership interest in assets held 

by the Federal entity under provision of law, regulation, or other fiduciary arrangement, usually 

including an ownership interest in any related income generated. For there to be a fiduciary 

activity under this standard, there must be a fiduciary relationship based on statutory or other 

legal authority and evidence that the Government activity is in furtherance of that relationship. 

The ownership interest must be enforceable against the Federal Government. Judicial 

remedies must be available for the breach of the fiduciary obligation. 
Appendix B: Glossary 26 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Fiduciary Asset – In this standard, fiduciary assets are assets in which non-Federal parties 

have an ownership interest and are held by a Federal entity under provision of law, regulation or 

other fiduciary arrangement. 

Fiduciary Collections - Fiduciary collections are an inflow to a Federal entity of cash or other 

assets in which non-Federal parties have an ownership interest that the Federal Government 

must uphold. 

Fiduciary Fund Balance with Treasury – Cash that is held in the U.S. Treasury and 

administered by a Federal entity on behalf of fiduciary beneficiaries. 

Fiduciary Relationship – A relationship in which an entity or authorized agent of the 

Government accepts, recognizes, agrees to or consents to undertake fiduciary activity. A 

fiduciary relationship is based on statutory or other legal authority and evidence that the 

Government activity is in furtherance of that relationship. A fiduciary relationship may be 

implied from the actions of Federal parties acting within the scope of their authority. 

Forfeited Property – Forfeited property is property for which title has passed to the 

Government. Forfeited property includes (1) monetary instruments, intangible property, real 

property, and tangible personal property acquired through forfeiture proceedings; (2) property 

acquired by the government to satisfy a tax liability; and (3) unclaimed and abandoned 

merchandise.

Fund – Fund has more than one meaning. Depending on the context it may mean merely a 

resource as in funds available to pay an obligation. Or, for budgetary accounting, it may mean 

Federal funds or “trust funds,” the two major groups of funds in the budget.20 The Federal funds 

include all transactions not classified by law as being in trust funds. The main financing 

component of the Federal funds group is referred to as the General Fund, which is used to carry 

out the general purposes of Government rather than being restricted by law to a specific 

program and consists of all collections not earmarked by law to finance other funds. 

A fund can also mean a fiscal and accounting entity with a self-balancing set of accounts 

recording cash and other assets, together with all related liabilities and residual equities or 

balances, and changes therein, which are segregated for the purpose of carrying on specific 

activities or attaining certain objectives in accordance with special regulations, restrictions, or 

limitations. 

The term “fund” is used in multiple contexts in this standard. For example, the 

introductory and background material discusses funds in the context of budget accounting. On 

the other hand, when the standard refers to a fiduciary fund in the illustrations that follow this 

Glossary, it is in the context a self-balancing set of accounts. 

Fund Balance with Treasury – A Federal entity’s fund balance with the Treasury is the 

aggregate amount of funds in the entity’s accounts with Treasury for which the entity is 

authorized to make expenditures and pay liabilities. Fund balance with Treasury is an intragovernmental item. From the component entity’s perspective, a fund balance with Treasury is 

an asset because it represents the entity’s claim to the Federal Government’s resources. 

However, from the perspective of the Federal Government as a whole, it is not an asset; and 

while it represents a commitment to make resources available to Federal departments, 

agencies, programs and other entities, it is not a liability. An entity’s fund balance with Treasury 

 

20 An explanation of the two major categories of Federal Funds and Trust Funds may be found in Chapter 22, “Trust Funds and 

Federal Funds,” of Analytical Perspectives, Budget of the U.S. Government, Fiscal Year 2006. 
Appendix B: Glossary 27 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

is increased by, among other things, amounts collected and credited to a fund that the entity is 

authorized to spend or use to offset its expenditures. Disbursements made to pay liabilities or 

to purchase assets, goods, and services, investments in Treasury or other securities, transfers 

and reimbursements to other entities or to the Treasury, and similar transactions reduce an 

entity’s fund balance with Treasury. 

Garnishments - Garnishments are a method of debt collection in which a portion of a person’s 

salary or tax refund is paid to a third party in compliance with a statute or court order. 

General Fund – The general fund accounts for receipts not earmarked by law for specific 

purposes, the proceeds of general borrowing, and the expenditure of these monies. General 

fund receipts constitute the greater part of the budget, e.g., almost all income tax receipts are 

general fund receipts. General fund appropriations draw from general fund receipts and 

borrowing collectively and, therefore, are not linked to specific receipts. [See The Budget of the 

United States FY 2006, Analytical Perspectives, Chapter 26, The Budget System and Concepts 

and Glossary.] 

Nonexchange Revenue – Nonexchange revenue is an inflow of resources to the Government 

that the Government demands or that it receives by donations. The inflows that it demands 

include taxes, duties, fines, and penalties. 

Non-Federal Individuals or Entities – Individuals and entities acting in their private capacities 

outside of the authority and control of the Federal Government. Federal employees are “nonFederal individuals” when acting in their private capacities, e.g., with respect to their private 

retirement savings managed by the Federal plan. 

Non-Federal Parties – See “Non-Federal Individuals and Entities.” 

Non-Valued Fiduciary Assets – Fiduciary assets for which required disclosure does not 

include dollar values. Non-valued fiduciary assets may include land held in trust. Fiduciary 

non-valued assets should be disclosed in accordance with generally accepted accounting 

principles.21 

Other Financing Sources – Inflows of resources that increase net position of a reporting entity 

during the reporting period but that are not revenues or gains. They include appropriations used, 

transfers of assets from other Government entities, and financing imputed with respect to any 

cost subsidies. Financing outflows may result from transfers of the reporting entity’s assets to 

other Government entities or from exchange revenues earned by the entity but required to be 

transferred to the General Fund or another Government entity. Unexpended appropriations are 

recognized separately in determining net position but are not financing sources until used. 

Ownership Interest– The possession of substantially all of the benefits and risks incident to 

ownership. 

Payroll withholdings – Amounts that are withheld from payment of wages to an employee and 

subsequently remitted to other payees, such as Federal, State or local governments; or health 

or life insurance providers, on behalf of the employee. 

 

21 In the future, the Board may require dollar values for certain categories. In the event of such a change in accounting principles, 

the affected categories would no longer be included in non-valued fiduciary assets.
Appendix B: Glossary 28 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Revenue – See “Exchange Revenue” and “Nonexchange Revenue.” 

Seized Property –Seized property includes monetary instruments, real property and tangible 

personal property of others in the actual or constructive possession of the custodial agency. 

Unearned Revenue – Unearned revenue is a liability that represents money (income) received 

in advance of being earned. Unearned revenue is also a liability if a Federal entity requests 

advances prior to the receipt of cash and records the amount.22.

 

22 See SFFAS 1, paragraph 85, SFFAS 7, paragraph 37, and SFFAS 1, paragraph 41. 
Appendix C: Examples of Fiduciary Note Disclosure 29 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Appendix C: Examples of Fiduciary Note Disclosure 

1. Example of Fiduciary Note Disclosure for Federal Component Entity 

The following illustrates the summary financial information required in paragraph 18. 

Fiduciary Activities 

Fiduciary activities are the collection or receipt, and the management, protection, accounting, 

investment and disposition by the Federal Government of cash or other assets in which nonFederal individuals or entities have an ownership interest that the Federal Government must 

uphold. 

Fiduciary cash and other assets are not assets of the Federal Government and accordingly are 

not recognized on the balance sheet. 

[Fiduciary Fund A] was authorized by the [legislation], which authorized [the component entity] 

to collect [type of collections] on behalf of [beneficiaries]. Other fiduciary activities by [the 

component entity] include but are not limited to [examples of fiduciary activities included in 

“other.”] 

 Department XYZ 

 Schedule of Fiduciary Activity 

 As of September 30, 20010 and 2009 

 

 2010 2010 20010 2009 2009 2009 

Fiduciary 

Fund A 

Other 

Fiduciary 

Funds 

Total 

Fiduciary 

Funds 

Fiduciary 

Fund A 

Other 

Fiduciary 

Funds 

Total 

Fiduciary 

Funds 

Contributions $ 233,450 $ 116,550 $ 350,000

 

$ 200,000 $ 125,000 $ 325,000 

Investment earnings 116,725 58,275 175,000 100,000 65,000 165,000 

Gain (Loss) on 

disposition of 

investments, net 6,670 3,330 10,000 4,000 1,000 5,000 

Disbursements to 

beneficiaries (300,150) (149,850) (450,000) (200,000) (150,000) (350,000)

Increases in fiduciary 

fund balances 56,695 28,305 85,000 104,000 41,000 145,000 

Fiduciary net assets, 

beginning of year 1,810,905 904,095 2,715,000 1,570,000 1,000,000 2,570,000 

Fiduciary net assets, 

end of year $ 1,867,600 $ 932,400 $2,800,000 $1,674,000 $1,041,000 $2,715,000 

 
Appendix C: Examples of Fiduciary Note Disclosure 30 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Fiduciary Net Assets 

 As of September 30, 2010 and 2009 

 

 2010 2010 2009 2009 2009 2009 

 Fiduciary 

Fund A 

Other 

Fiduciary 

Funds 

Total 

Fiduciary 

Funds 

Fiduciary 

Fund A 

Other 

Fiduciary 

Funds 

Total 

Fiduciary 

Funds 

FIDUCIARY ASSETS 

Cash and cash 

equivalents $ 566,800 $ 254,654 

$ 

821,454 $ 250,000 $ 275,000 $ 525,000 

Investments 1,300,000 677,746 1,977,746 1,424,000 766,000 2,190,000 

Other assets 1,000 1,000 

 Less: Accounts Payable (200) (200) 

TOTAL FIDUCIARY NET 

ASSETS 

 $ 

1,867,600 $ 932,400 

$ 

2,800,000 $1,674,000 $1,041,000 $2,715,000 
Appendix C: Examples of Fiduciary Note Disclosure 31 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

2. Example of Note Disclosure for the Government-wide Financial Report 

The following illustrates the summary information required in paragraph 27. 

Fiduciary Activities 

Fiduciary activities are the collection or receipt, and the management, protection, accounting, 

investment and disposition by the Federal Government of cash or other assets in which nonFederal individuals or entities have an ownership interest that the Federal Government must 

uphold. 

Fiduciary cash and other assets are not assets of the Federal Government and accordingly are 

not recognized on the balance sheet. Examples of the Federal Government’s fiduciary activities 

include the Indian tribal and individual Indian trust funds, which are administered by the 

Department of the Interior, and the Thrift Savings Fund, which is administered by the Federal 

Retirement Thrift Investment Board. 

The following Federal component entities were responsible for fiduciary net assets at 

September 30, 2010 and 2009. Detailed information is available in the financial statements of 

the Federal component entities. The Federal component entity websites are listed on page ##

of this document. 

Schedule of Fiduciary Net Assets 

 FY 2010 FY 2009 

Department A $ xxxxx $ xxxxx

Department B xxx xx

Department C xxxxx xxxxx

Department D xxxxxxx xxxxxxx

All Other x x

Total xxxxxxxxxxxxx xxxxxxxxxxxxx

 
Appendix D: Pro Forma Transactions 32 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Appendix D: Pro Forma Transactions 

Note: The following pro forma transactions illustrate how the information for the fiduciary note 

disclosure can be recorded in a component Federal entity’s financial system utilizing the 

U.S. Government Standard General Ledger.23 The approach illustrated utilizes several general 

ledger accounts that are linked to a note disclosure and not to line items in the principal financial 

statements. Component entities are also permitted to utilize a separate financial system for 

fiduciary activities. Transactions and balances that crosswalk to the fiduciary note disclosure 

are shaded. 

Table of Illustrations 

Illustration #1 – Federal component entity receives and holds non-Federal party’s cash 

as Fund Balance with Treasury (FBWT). 

Illustration #2 – Federal component entity invests non-Federal party’s FBWT in Treasury 

securities. 

2A – Federal entity’s purchase of Treasury securities on behalf of non-Federal party 

2B – Receipt of appropriation by Bureau of Public Debt to pay interest on non-Federal 

party’s Treasury securities 

2C – Treasury Bureau of Public Debt pays interest on Treasury securities 

Illustration #3 – Federal component entity invests non-Federal party’s cash in nonTreasury securities. 

3A – Federal entity purchases non-Treasury securities on behalf of non-Federal party 

3B – Receipt of interest earned on non-Federal party’s non-Treasury securities 

Illustration #4 – Federal component entity disburses interest earned to non-Federal party. 

Illustration #5 – Closing entries 

Illustration #6 – Effect of pro forma transactions on the Federal Component Entity’s 

Financial Statements. 

Illustration #7 – Effect of pro forma transactions on the consolidation worksheet for the 

U.S. Government-wide financial report. 

 

23 Section 803(a) of the Federal Financial Management Improvement Act of 1996 (P.L. 104-208, Division A, Section 101(f), Title 

VIII) requires Federal agencies to implement the U.S. Government Standard General Ledger (USSGL) at the transaction level. 

Information about the USSGL can be found on the website of the Treasury Financial Management Service at 

www.fms.treas.gov/ussgl. 
Appendix D: Pro Forma Transactions 33 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Illustration #1 – Federal component entity receives and holds non-Federal party’s cash. 

 

 DR CR 

 Federal Component Entity 

Fiduciary Fund Balance with Treasury (FBWT) 1,500 

Fiduciary Collections Received from Beneficiaries 1,500 

 To record fiduciary cash collected. 

 

 Treasury General Fund Entity 

 Treasury’s Government-Wide Cash Account 1,500 

 Treasury General Fund Liability for Fiduciary FBWT 1,500 

 To record cash received and held by component entity as Fiduciary FBWT. 

 

Illustration #2 – Federal component entity invests Fiduciary FBWT in Treasury securities.

 

2A Federal component entity invests FBWT in Treasury securities 

 

 Federal Component Entity 

Fiduciary Investments in Treasury Securities 1,000 

 Fiduciary FBWT 1,000 

 To record fiduciary Treasury securities purchased. 

 

 Treasury General Fund Entity 

 Treasury General Fund Liability for Fiduciary FBWT/Component Entity 1,000 

 Treasury General Fund’s Liability for FBWT/Treasury Bureau of Public Debt 1,000 

 To record purchase of Treasury securities. 

 

 Treasury Bureau of Public Debt Entity 

 FBWT 1,000 

 Liability for Fiduciary Treasury securities 1,000 

 To record sale of Treasury securities. 

2B Treasury Bureau of Public Debt receives an appropriation to fund interest expense 

 Treasury General Fund Entity 

Treasury’s Government-wide Cash Account 50

 Transfer-In from Federal Reserve 50

Treasury General Fund receives transfer of Federal Reserve earnings 

 

Appropriation Warrants Issued 50 

 Treasury’s Liability for FBWT/Bureau of Public Debt 50

Treasury issues appropriation warrant to the Bureau of Public Debt 

 

 

 
Appendix D: Pro Forma Transactions 34 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

 Treasury Bureau of Public Debt Entity 

FBWT 50 

 Appropriations Received24 50

To record appropriation received. 

 

2C Treasury Bureau of Public Debt pays interest on Treasury securities. 

 

 Treasury Bureau of Public Debt Entity 

Interest expense 50 

 FBWT 50 

Unexpended Appropriations- Used 50 

 Expended Appropriations 50

To record appropriation received and interest expense paid. 

 

 Federal Component Entity 

Fiduciary FBWT 50 

 Interest revenue/Fiduciary 50

To record interest received on fiduciary investments. 

 

 Treasury General Fund Entity 

Treasury General Fund Liability for FBWT/Treasury Bureau of Public Debt 50 

 Liability for Fiduciary FBWT/Component Entity 50 

To record payment of interest by Treasury Bureau of Public Debt 

Illustration #3 – Federal component entity invests non-Federal party’s assets in non-Treasury securities. 

 

3A Federal component entity purchases non-Treasury securities on behalf of non-Federal party 

 

 Federal Component Entity 

Fiduciary Investments in non-Treasury securities 500 

 Fiduciary Fund Balance with Treasury 500 

 To record securities purchased on behalf of non-Federal parties. 

 

 Treasury General Fund Entity 

 Treasury's Liability for Fiduciary FBWT/Component Entity 500 

 Treasury's Government-wide Cash Account 500 

 To record cash withdrawal. 

 

24 Note: Accounting for appropriations requires additional budgetary entries that are not displayed here. For additional information, 

refer to the Treasury Financial Manual Standard General Ledger Supplement at www.fms.treas.gov/ussgl. 
Appendix D: Pro Forma Transactions 35 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

3B Interest is received on non-Treasury securities and held as FBWT 

 

Federal Component Entity 

Fiduciary FBWT 10

 Interest Revenue/Fiduciary 10

To record interest received on fiduciary investments held outside of the U.S. 

Treasury. 

 

 

Treasury General Fund Entity 

Treasury Government-wide cash account 10 

 Treasury General Fund Liability for Fiduciary FBWT/Component Entity 10

To record cash received and deposited as fiduciary FBWT. 

 

Illustration #4 – Federal entity disburses interest earned to non-Federal beneficiaries 

4. Disbursement to beneficiaries of interest earned. 

 

 Federal Component Entity 

 Fiduciary Disbursements to Beneficiaries 50

 Fiduciary FBWT 50

 Payment made to beneficiaries. 

 

 Treasury General Fund Entity 

 Treasury General Fund Liability for Fiduciary FBWT/Component Entity 50 

 Treasury's Government-wide Cash Account 50

 To record cash withdrawal. 

 
Appendix D: Pro Forma Transactions 36 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Illustration #5 – Closing Entries for Pro Forma Transactions Illustrated 

Pre-closing trial balances after pro forma transactions: 

 Component 

Entity 

Treasury 

GF 

Treasury 

BPD 

Assets

Fiduciary FBWT 10 

FBWT (Non-Fiduciary) 1,000 

Government-wide Cash 1,010 

Fiduciary Investments in Treasury Securities 1,000 

Fiduciary Investments in non-Treasury Securities 500 

Liabilities 

Liability for Fiduciary FBWT (10) 

Liability for FBWT (1,000) 

Liability for Fiduciary Investments in Treasury Securities (1,000)

Net Position 

Fiduciary Net Assets 

Unexpended Appropriations- Appropriations Received (50) 

Unexpended Appropriations- Used 50 

Revenues and Other Financing Sources 

Fiduciary Collections- Contributions from Beneficiaries (1,500) 

Interest Revenue/Fiduciary (60) 

Transfer-In from Federal Reserve (50) 

Expended Appropriations (50) 

Expenses and Miscellaneous Items 

Interest Expense 50 

Fiduciary Disbursements to Beneficiaries 50 

Appropriation Warrants Issued 50 

Totals 0 0 0 
Appendix D: Pro Forma Transactions 37 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Closing entries: 

 

 Federal Component Entity 

 Fiduciary Collections- Contributions from Beneficiaries 1,500

 Interest Revenue/Fiduciary 60

 Fiduciary Disbursements to Beneficiaries 50

 Fiduciary Net Assets 1,510

 

 Treasury Bureau of Public Debt Entity

 Cumulative Results of Operations 50 

 Interest Expense 50

 Unexpended Appropriations- Received 50 

 Unexpended Appropriations- Cumulative 50 

 Unexpended Appropriations- Cumulative 50 

 Unexpended Appropriations- Used 50

 Expended Appropriations 50

 Cumulative Results of Operations 50

 

 Treasury General Fund Entity

 Cumulative Results of Operations 50

 Appropriation Warrants Issued 50

 Transfer-In of Federal Reserve Revenue 50

 Cumulative Results of Operations 50

Post-closing trial balances after pro forma transactions: 

 Component 

Entity 

Treasury 

GF 

Treasury 

BPD 

Assets

Fiduciary FBWT 10

FBWT (Non-Fiduciary) 1,000

Government-wide Cash 1,010 

Fiduciary Investments in Treasury Securities 1,000

Fiduciary Investments in non-Treasury Securities 500

Liabilities

Liability for Fiduciary FBWT (10) 

Liability for FBWT (1000) 

Liability for Fiduciary Investments in Treasury Securities (1,000)

Net Position

Fiduciary Net Assets (1510)

Totals 0 0 0
Appendix D: Pro Forma Transactions 38 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Illustration #6 – Illustration of Federal Component Entity Note Disclosure of Pro Forma 

Transactions 

FEDERAL COMPONENT ENTITY 

SCHEDULE OF FIDUCIARY ACTIVITY 

FOR THE PERIOD ENDED SEPTEMBER 30, 20xx FY 20x2 FY 20x1 

Contributions from Beneficiaries 1,500 - 

Interest on investments 60 - 

Disbursements to Beneficiaries (50) - 

Increase in Fiduciary Assets 1,510 - 

Fiduciary Net Assets, Beginning of Year - - 

Increase in Fiduciary Assets 1,510 - 

Fiduciary Net Assets, End of Year 1,510 - 

FIDUCIARY NET ASSETS 

AS OF SEPTEMBER 30, 20xx 

FY 20x2 FY 20x1 

Cash and Cash Equivalents $ 10 $ - 

Investments in Treasury Securities 1,000 - 

Other Investments 500 - 

Total Net Assets $ 1,510 - 

 

NOTE: The illustration above displays only the impact of the pro forma 

transactions upon the fiduciary note disclosure. See Appendix C for a more 

detailed illustration of the fiduciary note disclosure. 
Appendix D: Pro Forma Transactions 39 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Illustration #7 – Effect of Pro Forma Transactions upon Elimination Worksheet for 

Government-wide reporting 

 

IMPACT ON GOVERNMENT-WIDE 

ELIMINATION WORKSHEET 

Federal 

Component 

Entity Note 

Disclosure

Treasury 

Bureau of 

Public Debt

Treasury 

General 

Fund 

Eliminations 

Governmentwide 

Balance 

Sheet 

Government

-wide Note 

Disclosure 

 ASSETS 

 Fiduciary Fund Balance with Treasury $ 10 $ - $ - $ - $ - $ 10

 Fund Balance with Treasury - 1,000 - (1,000) - 

 

Fiduciary Investments in Treasury 

Securities 1,000 - - - 1,000

 

Fiduciary Investments in non-Treasury 

securities 500 - - - 500

 

Treasury's Government-wide cash 

account - - 1,010 - 

 

 1,010 

 Total assets $ 1,510 $ 1,000 $ 1,010 $ (1,000) $ 1,010 $ 1,510* 

 

 LIABILITIES 

 Treasury's Liability for Fiduciary FBWT $ - $ - $ 10 $ - $ 10 $ - 

 Treasury's Liability for FBWT - - 1,000 (1,000) 

 

Treasury BPD Liability for Fiduciary

Investments - 

 

 1,000 - - 

 

 1,000 

 

 NET POSITION 

 Fiduciary net assets $ 1,510 $ - - 1,510 

 Total liabilities and net position 

 $ 1,510 

* $ 1,000 $ 1,010 $ (1,000) 

 $ 1,010 

$ 1,510 *

* Note: 

• The Federal Component Entity’s fiduciary assets, liabilities and net assets (shaded and in 

italics in the above table) are reported in the fiduciary note disclosure only, and not 

recognized on the face of the Component Entity’s balance sheet or on the 

Government-wide balance sheet. 

• Treasury General Fund liability for fiduciary FBWT is not eliminated. 

• Treasury BPD liability for fiduciary securities is not eliminated. 

• Note disclosure of fiduciary funds is required at the FR level. 

– 

The illustration above displays only the impact of the pro forma transactions upon the 

eliminations for Government-wide reporting. See Appendix C for an illustration of the 

fiduciary note disclosure. 
Appendix E: List of Abbreviations 40 

Federal Accounting Standards Advisory Board 

Accounting for Fiduciary Activities 

October 24, 2006 

Appendix E: List of Abbreviations 

FASAB Federal Accounting Standards Advisory Board 

FBWT Fund Balance with Treasury 

FR Financial Report of the U.S. Government 

FY Fiscal Year 

GAAP Generally Accepted Accounting Principles 

GAO Government Accountability Office 

OMB Office of Management and Budget 

SFFAC Statement of Federal Financial Accounting Concepts 

SFFAS Statement of Federal Financial Accounting Standards 

Treasury BPD Treasury Bureau of Public Debt 

Treasury FMS Treasury Financial Management Service 

U.S. United States 

USSGL U.S. Government Standard General Ledger 
FASAB Board Members

David Mosso, Chairman 

Tom L. Allen 

Claire Gorham Cohen 

Robert F. Dacey 

John A. Farrell 

Donald B. Marron 

James M. Patton 

Robert N. Reid 

Alan H. Schumacher 

David M. Zavada 

FASAB Staff

Wendy M. Comes, Executive Director 

Project Staff: 

Eileen Parlow 

 ____________________________________________________ 

Federal Accounting Standards Advisory Board

441 G Street NW 

Suite 6814 

Mailstop 6K17V 

Washington, DC 20548 

Telephone (202) 512-7350 

FAX (202) 512-7366 

www.fasab.gov 

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