In the statement of fiduciary net position prepared for an Investment Trust Fund,how should the equity of the participants in the investment pool be characterized?

Question

Quizplus · Accepted Answer

The equity of the participants in the investment pool should be characterized as "net position held in trust" because an Investment Trust Fund is created for the purpose of holding and investing assets on behalf of other governments, organizations, or individuals, and therefore operates as a fiduciary. The net position in the statement of fiduciary net position represents the assets held in trust for the beneficiaries/participants, and it is not characterized as fund balance or retained earnings, which are applicable to governmental or proprietary funds. The excess of additions over deductions may be a component of changes in the net position held in trust, but not necessarily the characterization of equity.

In the Statement of Fiduciary Net Position Prepared for an Investment