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23 Cards in this Set
- Front
- Back
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Pension Trust - Employer and Employee Contributions--Restricted Account |
Resources received are credited to the account "employee contributions --restricted." This account appears in the net assets section of the pension trust fund balance sheet & is disclosed in the footnotes. |
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Pension Trust - Expense (Deduction) Types |
Expenses of pension trust funds frequently include benefit payments, refunds and administrative expense. |
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Pension Trust - Unique Accounting Issues: Full Accrual |
Pension trust funds & public employee retirements systems (PERS) use the accrual basis of accounting (i.e., no budget & no encumbrances are used). |
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Pension Trust - Reporting Changes in Net Pension Liability |
Changes in the net pension liability are typically included in the pension expense of the government-wide financial statements and the appropriate funds responsible for funding the pension obligation. However, certain changes in the liability that are not included in pension expense are required to be reported as deferred outflows or deferred inflows of resources. |
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Pension Trust - Reporting Changes in Net Pension Liability - Changes charged to pension expense in the period of change |
Changes in net pension liability that are charged to pension expense in the period of change: 1. Current period service costs 2. Interest on total pension cost 3. Reductions for projected earnings on pension plan investments 4. Changes in benefit terms not eligible for deferral & therefore required to be included in pension expense immediately. |
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Pension Trust - Basis of Accounting |
Pension funds use the economic resources measurement focus. 1. Pension (and other employee benefit) trusts capitalize fixed assets & record related depreciation expense. 2. Pension (and other employee benefit) trusts carry long-term debt and pay both principal & interest. |
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Pension Trust - Financial Statements: |
Statement of Fiduciary Net Position: The statement of plan net position is prepared on an accrual basis & reports the plan's assets, liabilities, & net position.
Asset Valuation: For the most part, the plan's net assets (investments) are reported on a fair value basis. This statement identifies the major assets of the plan. |
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Pass Key - Pension Trust - Statement of Cash Flows |
The fiduciary & proprietary funds both use full accrual accounting. One significant difference between the fiduciary & proprietary funds is:
- Fiduciary funds (PAPI): cash flow statement not required. - Proprietary funds (SE): cash flow statement is required. |
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Agency Trust - Important Points: |
- Full accrual - Balance Sheet: Statement of Fiduciary Net Position - Income Statement: N/A - Statement of Cash Flows: N/A - Footnotes: when necessary |
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Agency Trust Fund (Mailman) - Purpose: |
An agency fund collects cash to be held temporarily for an authorized recipient to whom it will be later disbursed. This recipient may be another fund or some individual or firm or even government outside of the government.
Ex: Tax collection funds, clearance funds, special assessments, etc. |
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Agency Trust Fund - Tax Collection Funds Journal entry |
Tax collection funds exist when 1 local govt collects tax for an overlapping govt unit & remits the amount collected less administrative charges, to the recipient unit. J/E to record county collections & retaining of a fee: DR: Cash CR: Due to other units (towns) CR: Due to county general fund |
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Agency Trust Fund - Clearance Funds |
Clearance funds are used to accumulate revenues from different sources & apportion them to various operating funds in accordance with a statutory formula or procedure. 1. Cash Conduit Arrangements no monitoring a. Pass-through grants b. Food stamps c. Traffic citations d. Alimony, child support & other court ordered payments |
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Pass Key: Governmental Unit Monitoring |
If a governmental unit has monitoring and/or determines eligibility, the special revenue fund is used. |
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Agency Trust Fund - Special Assessments |
When the governmental unit "is not otherwise obligated" for the debt (i.e., not primarily or potential liable), the receivables and debt service transaction are appropriately accounted for in the agency fund. |
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Pass Key: Governmental Unit has Liability |
If a governmental unit has liability, accounting is made through the capital projects & debt service funds. |
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Agency Trust - Financial Statements: |
Agency funds do not use a statement of revenues & expenses. A statement of changes in assets & liabilities is prepared. Agency funds record no fund balance because current assets must equal current liabilities.
Statement of Fiduciary Net Position Current assets = current liabilities |
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Private Purpose Trust - Major Points |
- Not general public use - Full accrual - Balance sheet: Statement of Net Position - Statement of Cash Flows: Not required - Footnotes |
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Private Purpose Trust - Purpose |
The private purpose trust fund is the designated fund for reporting all other trust arrangements under which principal & income are for the benefit of one of the following: - Specific individuals - Private organizations - Other governments Ex: Escheat property fund, Other trusts |
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Private Purpose Trust - Expense Types |
1. Expenses: Expenses relate to the specific purpose of the trust & may relate to benefits or administrative charges.
2. Capital Gains (losses): Capital gains & losses are recorded as adjustments to fund principal & not to income, unless the grantor specified otherwise. |
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Pass key: To determine the correct fund account for restricted funds |
To determine the correct fund to account for restricted funds, use the following: Special revenue fund: Public - interest & principal (expendable) Permanent fund: Public - Interest only (non-expendable) Private Purpose fund: Private - Interest and/or principal (expendable) |
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Investment Trust Funds - Major Points |
- Full Accrual - Balance sheet: Statement of fiduciary net position - Income statement: Statement of changes in fiduciary net position - Statement of cash flows: not required - Footnotes |
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Investment Trust Funds - Purpose |
Accounting and Financial Reporting for Certain Investments and for External Investment Pools (GASB 31) established that a governmental entity that sponsors one or more external investment pools (sponsoring government) should report the external portion of each pool as a separate investment trust fund. |
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Investment Trust Fund - Financial Statements |
Statement of Fiduciary Net Position: Prepared on accrual basis & reports plan's assets, liabilities & net position. Identifies the major assets of the plan. Reported liabilities are subtracted from total assets & the difference reported as "net position held in investment trust." Statement of Changes in Fiduciary Net Position: Reports net increase or decrease in net plan position from beg. of yr til end of yr.
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