Custodial Fund is used to account for the assets held by a government acting as a tax collection agent for one or more other governmental units.
What is Custodial Fund?
Custodial funds will be made up of assets kept for the benefit of parties outside the administration of the fund by the government. The use of fund assets or their distribution cannot be decided administratively by governments managing custodial funds.
On behalf of the owners, a custodian is in charge of maintaining and protecting the investments and securities. By monitoring and preserving the security of the investors' assets made according to a custodial arrangement, a custodian aids in protecting the interests of the investors.
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