Expert: Allen - 9/7/2008

Question
For years my CPA has been taking the previous 5500's "Total plan assets" end-of-year balance, reporting that as "beginning of year" and then simply adding the contribution to get the "(b)End of Year" balance.  He says he called the Dept. of Labor and was told that was correct.

It does not make sense to me.  Is he correct?

Answer
It also doesn't make sense to me.

In most cases the beginning of the year assets will be the same as the assets at the end of the previous year. However, the end of the next year's assets will be the beginning balance + contributions for the year  + or - investment earnings or losses for the year - any distributions for the year.