Fiduciary Accounting

Fiduciary Accounting does not have one commonly understood meaning. In a broad sense, it can mean the entire process whereby a fiduciary -- normally a personal representative, trustee or guardian -- communicates information on an ongoing basis regarding his administration of a fund and periodically justifies his administration to the parties in interest and, perhaps, to a court. In another sense, it may be the process whereby a fiduciary -- here more often a trustee -- periodically keeps parties in interest currently informed of transactions and investment policies being followed. 

6 Principles of Fiduciary Accounting

1. Accounts should be stated in a manner that is understandable by persons who are not familiar with practices and terminology peculiar to the administration of estates and trusts.
2. A fiduciary account shall begin with a concise summary of its purpose and content.
3. A fiduciary account shall contain sufficient information to put the interested parties on notice as to all significant transactions affecting administration during the accounting period.
4. A fiduciary account shall include both carrying values -- representing the value of assets at acquisition by the fiduciary -- and current values at the beginning and end of the accounting period.
5. Gains and losses incurred during the accounting period shall be shown separately in the same schedule.
6. the account shall show significant transactions that do not affect the amount for which the fiduciary is accountable.