5500 on Accrual Basis
Posted 12 July 2001 - 05:53 PM
What happens in a situation where the 5500 is prepared on an cash basis and the audited financial statements are prepared on an accrual basis? The actual Participant Summary is cash. I realize this makes it harder, but it is acceptable? Also, we have just switched from Accrual to Cash....on the 5500. Any help would be greatly appreciated.
Posted 13 July 2001 - 11:23 AM
Regarding changing from accrual basis to cash basis on the Form 5500, the instructions state that you may use cash, modified cash, or accrual basis as long as you use one method consistently.
Posted 19 July 2001 - 03:04 PM
What if you have been doing dailey valued plans on an accrual basis for 2-3 years but now wish to start doing them on a cash basis? What, if anything needs to be done to effect the change?
Posted 20 July 2001 - 10:19 AM
The financial statements beginning of year balances would have to be adjusted to reflect the new accounting method. A footnote to the financial statements must reconcile the financial statements to the Form 5500.
On the 5500, although the instructions state that the chosen accounting method must be used consistently, the DOL allows you to change it. DON'T change the beginning of year balances. Include, in other income, the effect of the change in accounting method.
Posted 19 August 2001 - 03:03 PM
Posted 19 August 2001 - 03:17 PM