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Flashcards in Employee Benefit Plans/Trusts FS Deck (4)
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1

What are the 2 financial statements that must be prepared for Employee benefit plans and trusts according to GAAP?

1. statement of net assets available for benefits of the plan as of the end of the plan year.
2. statement of changes in net assets available for benefits of the plan for the year then ended

2

What 4 things must be included in the statement of net assets available for benefits of the plan?

1. total assets
2. total liabilities
3. net assets reflecting all investments at fair value
4. net assets available for benefits

3

What 8 things must be included in the statement of changes in net assets?

1. change in FV of each significant type of investment, including participant-directed and self-directed investments held in brokerage accounts. Gains and losses from investments sold need not be segregated from unrealized gains/losses relating to investments held at year end. May include in accompanying footnotes
2. investment income, exclusive of changes in FV
3. contributions from ER, segregated between cash and noncash contributions (noncash is recorded at FV, nature of noncash shall be described in either parenthetically or in a note)
4. contributions from participants, including those transmitted by the sponsor
5. contributions from other identified sources (ex state subsidies or federal grants)
6. benefits paid to participants
7. payments to insurance entities to purchase contracts that are excluded from plan assets
8. admin expenses

4

What are the 10 required disclosures for employee benefits plans and trusts?

1. brief description of the plan agreement
2. description of significant plan amendments adopted during the period and the effects of such amendments
3. amount of unallocated assets as well as basis used to allocate asset values to participant's accounts if that basis differs
4. basis for determining contributions by ER and, for a contributory plan, the method of determining participants' contributions
5. significant costs of plan administration are being absorbed by the ER
6. policy regarding the purchase of contracts with insurance entities that are excluded from plan assets
7. guarantees by others of debt of the plan
8. amounts allocated to accounts of persons who have elected to withdraw from the plan but have not yet been paid. These amounts are not reported as a liability on the statement of net assets available for benefits in FS prepared by GAAP
9. the federal income tax status of the plan if a favorable determination letter has not been obtained or maintained. Reports filed in accordance w/the requirements of the ERISA must include disclosure of information concerning whether a tax ruling or determination letter has been obtained
10. amount and disposition of forfeited nonvested accounts. Identification of those amounts that are used to reduce future ER contributions, expenses or reallocated to participant's accounts