FIDUCIARY ACCOUNTING PRINCIPLES

II. A fiduciary account shall begin with a concise summary of its purpose and content.

Commentary: Very few people can be expected to pay much attention to a document unless they have some understanding of its general purpose and its significance to them.  Even with such an understanding, impressions derived from the first page or two will often determine whether the rest is read.  The use that is made of these pages is therefore of particular significance.

The cover page should disclose the nature and function of the account.  While a complete explanation of the significance of the account and the effect of its presentation upon the rights of the parties is obviously impractical for inclusion at this point, there should be at least a brief statement identifying the fiduciary and the subject matter, noting the importance of examining the account and giving an address where more information can be obtained.

It is assumed that the parties would also have enough information from other sources to understand the nature of their relationship to the fund (e.g., residuary legatee, life tenant, remainderman), the function of the account, and the obligation of the fiduciary to supply further relevant information upon request.  It is also assumed that notice will be given of any significant procedural considerations such as limitation on the time within which objections must be presented.  This would normally be provided by prior or contemporaneous memoranda, correspondence or discussions.

A summary of the account shall also be presented at the outset.  This summary, organized as a table of contents, shall indicate the order of the details presented in the account and shall show separate totals for the aggregate of the assets on hand at the beginning of the accounting period; transactions during the period; and the assets remaining on hand at the end of the period.  Each entry in the summary shall be supported by a schedule in the account that provides the details on which the summary is based.

See Account Illustration