Chapter 8, Problem 1Q

What are the criteria for determining if a fiduciary relationship exists?

To determine

Explain the criteria for determining whether there is a fiduciary relationship exists or not.

Explanation of Solution

As per the statement no. 84 “fiduciary activities” of GASBS the following criteria should be met to identify the existence of fiduciary relationship:

• “The assets related to the activity must be controlled by the government.”
• “The assets related to the activity cannot be generated by the government’s exchange or non-exchange revenues (with the exception of passing through the grants).”
• “The government cannot benefit from the assets.”