QNEC as a receivable on Schedule H

[B21]

We are preparing Form 5500 for our client's 401(k) plan with a plan year ended December 31, 2019. In the course of the plan audit, it was discovered that the client applied an incorrect definition of compensation for deferral & matching contribution purposes. QNECs & additional matching contributions have been calculated & will be deposited to the accounts prior to the end of 2020.

Should the 2019 QNEC/matching contributions be reported as a receivable on the Form 5500 Schedule H?

[Bird]

Depends.  If you normally accrue contributions, then yes, or at least probably; I don't think the world would end if you treated them on a cash basis if I meant re-doing a whole lot of stuff and could explain it.  If filing on a cash basis then obviously no.

[RatherBeGolfing]

Agree with @Bird.  Cash basis - No.  Accrued - Yes.  I dont think the IQPA will go along with not listing it as a receivable since it is the only way the numbers will balance.  The explanation and reasoning for NOT listing it as a receivable on an accrual basis is likely more complicated and more work than fixing the 5500.

[B21]

I agree with you both. More logical to list as a receivable since the conditions existed as of the date of the financial statements.