The key guidance in GASB statement no. 84: through the issuance of GASB Statement No. 84, the GASB has eliminated the ambiguity that has existed in defining a fiduciary activity.

• Author: Buikema, Todd
• Position: THE ACCOUNTING ANGLE - Governmental Accounting Standards Board

The Governmental Accounting Standards Board (GASB) issued Statement No. 84, Fiduciary Activities, in January 2017. This article summarizes the key guidance to be found in the Statement No. 84, namely identifying fiduciary activities and accounting and financial reporting fiduciary activities.

IDENTIFYING FIDUCIARY ACTIVITIES

Through the issuance of GASB Statement No. 84, the GASB has eliminated the ambiguity that has existed in defining a fiduciary activity. Statement No. 84 provides criteria for state and local governments to use to identify whether an activity is fiduciary and should be reported as a fiduciary fund type in the basic financial statements. GASB Statement No. 84 provides the criteria for three types of activities: 1) fiduciary component units, 2) pension and OPEB arrangements that are not component units, and 3) other fiduciary activities.

Fiduciary Component Units and Pension and OPEB Arrangements.

An organization that meets the criteria for a component unit as prescribed by GASB Statement No. 14, The Financial Reporting Entity, is a fiduciary activity if it is one of the following arrangements: 1) a pension plan administered through a trust, as described in GASB Statement No. 67, Financial Reporting for Pension Plans', 2) an OPEB plan administered through a trust as described in GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans; 3) assets from entities that are not a part of the reporting entity and are accumulated for pensions as described in paragraph 116 of GASB Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68; and 4) assets from entities that are not a part of the reporting entity and are accumulated for OPEB as described in paragraph 59 of Statement No. 74.

Pension and OPEB arrangements that do not meet the definition of a component unit would be included as a fiduciary activity if the government controls the assets of one of the four arrangements, as described above.

In most cases, pension and OPEB plans that are administered through trusts that meet the criteria of GASB Statements No. 67 and Statement No. 74, respectively, will be separate legal entities. When a primary government is performing its determination as to whether a pension or OPEB plan are component units, the criteria for inclusion are whether there...