Trust Accounts

[Porus]

Dear All,

Appreciate your views on the following question:

A Trust holds some investments in quoted debt/equity funds (all Level1 valuation) in favour of the beneficiaries of the Trust. When the Settlor of the Trust contributes some money or some non-monetary assets to the Trust, would such contribution be taken to the P&L / Income&Exp statement of the Trust (at fair value in case of non-monetary contributions), or would such contributions be taken directly to Equity ?

Thanks & regards

[JRSB]

IFRS would probably say equity but you need to make sure IFRS applies and not local law or some other SORP for trusts etc. Don't trust accounts separate out an and income and capital account etc? I don't think trusts have equity, they have a capital account which may need to be preserved by the deed and only distribute income generated etc, so overall I'm not sure it applies and you'd probably have a trust-specific accounting policy based on SOrP. Can't see it being income though.

[Porus]

Thanks, will take a look at related SORPs.