32, Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans, rescinds the previous requirement that employers report the assets of IRC Section 457 deferred compensation plans on their balance sheet, unless they are acting as a fiduciary for those assets.
This requirement was based upon the unique status of IRC Section 457 deferred compensation plan assets, which legally remained the assets of the employer subject only to the claims of general creditors.
For all Code Section 457 deferred compensation plans maintained for government employees, a trust is required.
Amounts deferred under a new Code Section 457 deferred compensation plan for government employees must be held in trust.
The project will cover all state and local government entities except defined benefit pension plans and Internal Revenue Code section 457 deferred compensation plans
Recently, the Governmental Accounting Standards Board (GASB) has proposed guidance on Internal Revenue Code (IRC) Section 457 deferred compensation plans, property tax revenue recognition criteria, and custodial credit risk classifications involving bank holding companies.
Until the mid-1980s, most governments did not report assets associated with IRC Section 457 deferred compensation plans in their financial statements.