financial statement presentation of depreciation in investments

[Guest l balmer]

How are net depreciation in investments shown on the statement of changes of net assets available for benefits when depreciation in investments is large enough to causes net additions to be negative? Especially when this happens for both years in comparative statements. Do you move only the depreciation in investments to deductions?

[Demosthenes]

Depreciation is the reduction in usefulness of a capital asset used by a business. What kind of a depreciable asset is in this 401k plan?

If you've got capital assets, land, buildings, equipment, as part of the plans assets, then I'd suggest that you probably have a bigger issue than just the reporting.

Or is this just a realized/unrealized loss on a plan investment?

[Guest l balmer]

Follow up on f/s presentation:

The depreciation in investments is the realized/unrealized loss on investments. Normally, there is a net gain and this is shown in net additions. However, in 2001 there is a net realized/unrealized loss which exceeds contributions. Therefore, the net additions are negative in 2001.

Another plan would have negative additions for both 2000 and 2001. In that case, do you present the realized/unrealized loss in net deductions in the statement of changes in net assets available.

[mbozek]

Why not call the decline what it really is a net loss... Why call it some thing else that the participant will not understand (negative addition- huh?) ?? How about total contributions followed by net loss = net change in assets

[Guest b2kates]

I suggest you follow the AICPA audit guide for employee benefits plans or the PPC manual on same.

Of the top of my head I think it is call a statement of changes of Plan Assets.