True or False: Escheat assets held on behalf of other governments should be reported in a private-purpose trust fund if the government decides to use a separate fund for this purpose.

The statement is true because escheat assets, which are unclaimed or abandoned property that a government may hold until it can be claimed by the rightful owner, may indeed be segregated into a separate private-purpose trust fund. This practice allows for a clear distinction in how these assets are managed and reported, particularly when the government chooses to treat them differently from other funds.

Utilizing a private-purpose trust fund allows governments to manage these resources in a way that aligns with the intended usage, which may include disbursing funds for specific purposes or to designated beneficiaries when they eventually come forward to claim the property. Trust funds offer flexibility in administration and ensure accountability to stakeholders, aligning with governmental accounting principles that emphasize transparency and proper fund management.

This decision would also reflect the government’s commitment to proper stewardship of public resources. Therefore, if the government opts to use a separate fund to account for these escheat assets, it is appropriate to report them in a private-purpose trust fund, confirming the accuracy of the answer provided.