What should the SSAP disclose regarding fiduciary funds?

Fiduciary funds are used to account for resources that a government holds as an agent for others, such as trust funds or pension funds. In the context of disclosures in government financial statements, it is important to note that fiduciary funds are not included in the government-wide financial statements. This exclusion is due to the nature of fiduciary funds, which are not available for government operations. Instead, these funds are reported in separate financial statements—specifically, the fiduciary fund financial statements.

Given this context, the correct choice highlights the necessity of omitting fiduciary funds from government-wide financial statements. This ensures that the financial position and results of operations reflect only the government's own activities, without including transactions that are not part of its direct financial management. This approach aligns with accounting standards that require clarity and transparency regarding the limitations of governmental resources, focusing strictly on funds available for governmental functions. Understanding this concept is vital for accurate financial reporting and compliance with established accounting principles for governmental entities.