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Nonfiduciary Deposit Funds

Nonfiduciary Deposit Funds. A deposit fund is an account created to capture and record monies that do not belong to the Federal government. Nonfiduciary Deposit Funds.

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Nonfiduciary Deposit Funds

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  1. Nonfiduciary Deposit Funds A deposit fund is an account created to capture and record monies that do not belong to the Federal government.

  2. Nonfiduciary Deposit Funds • Applies to the nonfiduciary deposit funds. Nonfiduciary deposit funds are deposit funds that do not meet the definition and characteristics of fiduciary activities in SFFAS 31. • Fiduciary deposit funds should follow SFFAS No. 31.

  3. Current Nonfiduciary Deposit Funds • The USSGL section III transactions: (TC C108) Dr 1010 Cr 2400 • Issues: • Does not address investment activity • Does not address interest revenue from investment activity

  4. Interest Revenue Recorded in Nonfiduciary Deposit Funds NF Deposit Fund Makes a closing Entry DR 5310 CR 3310 NF Deposit fund earns Interest Revenue DR 1010 CR 5310 Agency’s financial statement DR 1010 CR 3310

  5. Proposed Accounting for Nonfiduciary Deposit Funds • Nonfiduciary deposit funds should only record assets and liabilities. • Assets in nonfiduciary deposit funds should be recognized as non-entity assets. • The offsetting liability (USSGL account 2400) should be recognized for all nonfiduciary deposit funds, including investment activities

  6. The FASAB Reference Supporting Recognition of Assets and a Liability(2400) in Nonfiduciary Deposit Funds FASAB ReferenceAccording to SFFAS 31, par 31: • 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 recognized on an entity’s balance sheet should be segregated from entity assets. An amount equal to non-entity assets recognized on the balance sheetshould be recognized as a liability

  7. Revised USSGL AccountEffective for 2012 Proposed Account Title: Liability for Nonfiduciary Deposit Funds and Undeposited Collections Account Number: 2400 Normal Balance: Credit Definition: Amounts offsetting undeposited collections and collections deposited in nonfiduciary deposit funds, awaiting disposition. This account does not close at yearend.

  8. Clearing Accounts Temporarily hold unidentifiable general, special, or trust fund collections that belong to the Federal government until they are classified to the proper receipt or expenditure account.

  9. Proposed New USSGL accountEffective for 2012 Account Title: Liability for Clearing Accounts Account Number: 2410 Normal Balance: Credit Definition: The amount that offsets collections deposited in clearing accounts awaiting disposition or reclassification.

  10. Why establish another liability account for clearing accounts? • To prevent double counting of revenue. • Apply principle of conservatism for all clearing account activities.

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