Cash basis & contribution allocations

[Guest Stacey L Miller]

I am moving to cash basis statements (eventually to daily val) but am uncertain how to handle discretionary contribution receivables. On the one hand, I need to allocate the contribution based on compensation from one year. On the other hand, with cash basis statements, it seems like I don't want the contribution to show up until it is deposited, usually in the following year. I can't visualize how to accomplish the allocation based on one year's data yet not have it show up until the next year's participant statements.

I'd appreciate insights from those of you who are doing cash basis statements.

[Guest Carol Ringwald]

In most recordkeeping systems you have the ability to post deposits as receivables. I have seen this done in many instances. You are correct that for cash basis statements you are only showing those transactions that were actually processed and invested during the period being reported on. If you show the contribution as a receivable it should show up that way on the statement. Then, when you are ready to make the actual deposit you transfer it from the receivable account for deposit to the actual investments.