accounting for delinquent contributions & related lost earnings

[TPApril]

I'm curious:

Plan reports on an accrued basis for contributions deposited after eoy.

For delinquent contributions that are discovered at a later date in the following year and deposited prior to completion of Form 5500 for relevant year, I believe those contributions are accrued in as well.

Howabout the related lost earnings?  This is for 5500 reporting.

 

[RatherBeGolfing]

14 hours ago, TPApril said:

For delinquent contributions that are discovered at a later date in the following year and deposited prior to completion of Form 5500 for relevant year, I believe those contributions are accrued in as well.

I agree, your 5500 should reflect the contributions, not the deposits.

 

14 hours ago, TPApril said:

Howabout the related lost earnings?  This is for 5500 reporting.

I would book the earnings in the year of correction.  Otherwise you would need to split earnings over both years to be accurate, and I just don't see the point.  Just be consistent.

[Cherry Park Advisory]

I agree that, on an accrual basis, the Form 5500 should reflect the contributions when they are owed to the plan rather than when they are deposited. For related lost earnings, if they have been calculated (or can be reasonably estimated) and are owed to the plan, they should generally be accrued as well. If they have not yet been determined, the treatment may depend on the facts and the applicable accounting guidance.