ASC

ASC 205-954

Health Care Entities

205 Presentation of Financial Statements

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In brief

IntermediatePresentationFinancial statement presentationIndustry-specificNot-for-profit

ASC 205-954 sets the basic financial statement presentation requirements for health care entities, both not-for-profit business-oriented and investor-owned. It requires a complete set of statements — balance sheet, statement of operations, statement of changes in equity (or net assets), statement of cash flows, and notes (205-954-45-1) — and permits descriptive alternative titles except that the cash flow statement should be titled "Statement of Cash Flows" (205-954-45-2). Presentation is essentially the same for both ownership forms except for items that are inapplicable, such as shareholders' equity for NFPs and contributions for investor-owned entities (205-954-05-1).

Key points (6)
  • The basic financial statements of a health care entity are a balance sheet, a statement of operations, a statement of changes in equity (or net assets), a statement of cash flows, and notes to the financial statements (205-954-45-1).
  • Financial reporting for not-for-profit, business-oriented entities and investor-owned health care entities is consistent except for transactions that clearly are not applicable — NFPs report no shareholders' equity, and investor-owned entities typically report no contributions (205-954-05-1).
  • Alternative descriptive titles may be used (for example, statement of financial position instead of balance sheet), but a statement of cash flows should only be titled 'Statement of Cash Flows' (205-954-45-2).
  • A not-for-profit, business-oriented health care entity also applies Subtopics 958-205, 958-210, 958-220, and 958-230, subject to the more specific guidance in Topic 954 (205-954-05-2).
  • The scope of this Subtopic is the same as the Overall Subtopic scope in Section 954-10-15 (205-954-15-1).
  • Former paragraphs 205-954-45-8 and 45-9 were superseded by ASU 2016-14 (the NFP financial statement presentation update).

For students. This is a short industry-specific overlay: the takeaway is the required set of five statement components and that NFP health care entities follow the general NFP presentation Subtopics (958-205 through 958-230) unless Topic 954 says otherwise. A common misunderstanding is assuming NFP health care entities present like other NFPs in all respects — they use a business-oriented "statement of operations" and the more specific Topic 954 guidance controls.

health care entitiesnot-for-profit business-oriented entityinvestor-owned entitystatement of operationscomplete set of financial statementsnet assetsfinancial statement titles

Machine-generated study aid for ASC 205-954. Check the source paragraphs below.

205-954-00Status

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205-954-05Overview and Background

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205-954-05-1
This Subtopic provides guidance on the presentation of financial statements for health care entities. The financial reporting for not-for-profit, business-oriented entities and investor-owned health care entities is consistent except for transactions that clearly are not applicable. For example, not-for-profit, business-oriented entities would have nothing to report for shareholders' equity. On the other hand, investor-owned health care entities typically would not have anything to report for contributions.
205-954-05-2
A not-for-profit, business-oriented health care entity also applies guidance in the following Subtopics subject to the more specific guidance that is provided in this Topic:
  1. a
    Not-for-Profit Entities—Presentation of Financial Statements, Subtopic 958-205
  2. b
    Not-for-Profit Entities—Statement of Financial Position, Subtopic 958-210
  3. c
    Not-for-Profit Entities—Income Statement—Reporting Comprehensive Income, Subtopic 958-220
  4. d
    Not-for-Profit Entities—Statement of Cash Flows, Subtopic 958-230.

205-954-15Scope and Scope Exceptions

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Overall Guidance

205-954-15-1
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 954-10-15.

205-954-45Other Presentation Matters

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Complete Set of Financial Statements

205-954-45-1
The basic financial statements of health care entities consist of a balance sheet, a statement of operations, a statement of changes in equity (or net assets), a statement of cash flows, and notes to the financial statements.
205-954-45-2
The terms balance sheet and statement of operations indicate the content and purpose of the respective statements and serve as possible titles for those statements. Other appropriately descriptive titles may also be used. For example, a statement reporting financial position could be called a statement of financial position as well as a balance sheet. Current practice and purpose suggest, however, that a statement of cash flows only be titled Statement of Cash Flows.

205-954-50Disclosure

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Related subtopics