7-8. Describe GASB requirements for accounting for Investment Trust Funds:
(a) A discussion of when the use of investment trust funds is essential when receiving the Government’s contributions particularly in form of an investment’s pool (Copley, 2014).
(b) The investments to be included and excluded; Copley (2014) states that the external share of the investment compromises the Government assets. Whereas, the internal share of the investment is simultaneously under the County funds report.
People Also Read
- Critical Analysis of Ephesians 4:25-32
- Addressing Statutory Issues and Land Contamination in Construction Projects
- Effective Pricing Strategies for Marilyn Lyohir’s Business
(c) The basis at which investments are to be reported; According to Copley (2014), investments under the investment trust funds should be reported in accordance to the focus on the measurement of the utilized economic resources, as well as effective accounting on an accrual basis.
(d) Reporting of realized and unrealized gains and losses on investments; Copley (2014) explains that both the realized as well as the unrealized gains together with losses are accordingly reported in the operating statements as revenues.
(e) Financial reporting (i.e., financial statements); As per Copley (2014), Investment Trust Funds are generally reported and defined as fiduciary funds, therefore utilizing both the Statement of Changes in Fiduciary Net Position as well as Statement of Fiduciary Net Position as the vital and the primary financial statements.
7-10. What are the required financial statements for a pension trust fund? What are the required supplementary information schedules?
According to Copley (2014), a pension trust fund essentially requires two main financial statements. Firstly, the Statement of changes in plan net assets and secondly the Statement of plan net assets. Copley (2014) further states that the essential supplementary information schedules utilized are the schedule of the employer as well as funding progress.
7-11. About current GASB standards for pension reporting:
- Distinguish between (1) defined contribution plans and (2) defined benefit plans.
An effective contribution plan functions by paying out specifically the total amount accumulated per employee (Copley, 2014). Copley (2014) states that an effective benefit plan functions by paying out a particular benefits level, not putting into consideration the total amount of accumulation.
- Distinguish between (1) agent and (2) cost-sharing multiemployer plans.
According to Copley (2014), a well efficient agency plan functions by deliberately assigning each employer with a separate and distinct account, moreover assuming the responsibility of assuring their contributions are kept updated. Nevertheless, Copley (2014) describes cost-sharing plans as statewide, where it effectively functions by ensuring all their employers share a particular account. Therefore, any forms of deficit that may arise will be fully recovered state-wide, moreover, all employers under the cost-sharing plans face extra charges to right the wrong, and balance the ledger (Copley, 2014).
- Define the following terms: (1) plan fiduciary net position and (2) net pension liability.
Copley (2014) defines a plan fiduciary net position as the specific excess or surplus of the resources available, divided by the calculated total benefits that are payable to the firm’s retired employers. On the other hand, Copley (2014) describes the net pension liability as the total difference calculated between both the net position as well as the pension liability of the pension fund.
d. Distinguish between reporting for employers for (1) general government employees and for (2) enterprise fund employees.
Copley (2014) states that the general government employees are accordingly reported annually within the general, or a different governmental fund, whereupon there are financial resources limited as per the total liquidated amount. Whereas the enterprise fund employees are entirely defined and directed according to each of their species as well as different types of contribution plans (Copley, 2014).
References
Copley, P. A. (2014). Essentials of accounting for governmental and not-for-profit organizations.
With a student-centered approach, I create engaging and informative blog posts that tackle relevant topics for students. My content aims to equip students with the knowledge and tools they need to succeed academically and beyond.
