The accounting used when managing a trust is different than that of a business.
According to "Your Estate Matters" by Patti Spencer, a fiduciary is someone who handles property for the benefit of another. The person for whom the fiduciary manages the money is called the beneficiary. Fiduciary accounting is used when administering a trust or settling an estate.
Accounting
Fiduciary accounting shows how the money is being used for the benefit of the intended person. This is also called fiduciary bookkeeping. According to "Build and Manage an Estates Practice" by Daniel Evans, fiduciary accounting accounts for all assets of an estate or trust, all principle and income of the estate or trust, and all debts owed to the estate or trust.
Time Frame
Fiduciary accounting is used when settling an estate and distributing its assets. Trusts must be administered using fiduciary accounting. Fiduciary accounting is also used when assets are managed on behalf of minor children until they reach the age of majority. Fiduciary accounting is used when managing assets for the disabled.
Taxes
Fiduciary accounting is used when filing estate tax forms for the deceased. In the United States, this is IRS Form 1041. The 1041 is used for estate taxes and income taxes owed by an estate.
