modified cash accounting method

Can anyone provide any citation or guidance regarding the definition of modified cash accounting for Form 5500 reporting purposes. It was my understanding that this method reports all activity on a cash basis with the exception of employer/employee contributions & distributions which are accrued. However, I've seen audit reports completed stating the Form 5500 was prepared on a modified cash method & that contribution receivables are not required to be reported.

This question arises because there is a fundamental misunderstanding of terms.  Cash basis in lay terms means if the cash is there at the end of the year we count it; if not, we don't.  IRC §404(a)(6) deems deposits made within the extension period to be made on the last day of the preceding plan year.  Consequently, a discretionary non-elective (or matching) contribution made on July 18 of the following year, with respect to the previous year, is deemed to be there on December 31 (assuming calendar year).

[This feeds directly into the February discussion https://benefitslink.com/boards/index.php?/topic/63836-participants-with-an-account-balance/ discussing who has an account balance if the deposits are "receivable".--I vote all of them with their receivable counted]

Thus, using cash basis for plan reporting purposes, deposits made and deemed to have been made on December 31 are counted as plan assets.

On the other hand, CPAs are bound by AICPA terminology for describing their methods in an audit report and to differentiate from financial statements prepared in accordance with GAAP.  For treating plan accounting on a cash basis, but allowing for the §404(a)(6) divergence, auditors will use the term "modified cash".

In your statement above the employer contributions are not accrued, but rather deemed to have already been made.

This is probably TMI, but (how do they say?) the more you know...