ASC

ASC 340-954

Health Care Entities

340 Other Assets and Deferred Costs

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In brief

IntermediateSubsequent measurementPresentationIndustry-specificRecognition

This Subtopic covers "other assets and deferred costs" of health care entities — prepaid expenses, deposits, and deferred expenses, including amounts paid to physicians for future services such as administering a hospital department or providing community services that further the entity's mission (340-954-05-2). If such prepaid costs are deferred, they must be amortized over the period benefited (340-954-35-2), and all such items are classified as current or noncurrent as appropriate (340-954-45-1). The former recognition guidance (Sections 25 and part of 35) was superseded by ASU 2014-09, so contract cost questions now fall under ASC 340-40 and revenue under ASC 606.

Key points (5)
  • Scope follows the health care entity scope in Section 954-10-15 (340-954-15-1).
  • Other assets of health care entities may include prepaid expenses, deposits, and deferred expenses, and prepaid costs may include amounts paid to physicians for future services (340-954-05-2).
  • Deferred prepaid costs, including physician prepayments, shall be amortized over the period benefited (340-954-35-2).
  • Prepaid expenses, deposits, deferred expenses, and prepaid costs are classified as current or noncurrent as appropriate on a classified balance sheet (340-954-45-1).
  • All recognition guidance in Section 25 (340-954-25-1 through 25-3) and 340-954-35-1 were superseded by ASU 2014-09, shifting contract cost accounting to Subtopic 340-40.

For students. This is a short industry overlay: the only substantive rules left are amortize deferred prepaid costs over the period benefited and classify them current/noncurrent. The common mistake is looking here for contract acquisition or fulfillment cost guidance — ASU 2014-09 gutted the recognition paragraphs, so go to ASC 340-40 instead.

prepaid expensesdeferred costspayments to physicians for future servicesamortization over period benefitedcurrent versus noncurrent classificationhealth care entitiesdeposits

Machine-generated study aid for ASC 340-954. Check the source paragraphs below.

340-954-00Status

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340-954-00-1
The following table identifies the changes made to this Subtopic.
Paragraph Action Accounting Standards Update Date
954-340-25-1 through 25-3
 Superseded Accounting Standards Update No. 2014-09 05/28/2014
954-340-35-1 Superseded Accounting Standards Update No. 2014-09 05/28/2014

340-954-05Overview and Background

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340-954-05-1
This Subtopic addresses other assets and deferred costs for health care entities within the scope of this Topic.
340-954-05-2
Other assets may include prepaid expenses, deposits, and deferred expenses. Prepaid costs may include amounts paid to physicians for future services (for example, administering a hospital department or providing community services that further the entity's mission).

340-954-15Scope and Scope Exceptions

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Overall Guidance

340-954-15-1
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 954-10-15.

340-954-25Recognition

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340-954-35Subsequent Measurement

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Prepaid Costs

340-954-35-2
Prepaid costs, including amounts paid to physicians for future services (for example, administering a hospital department or providing community services that further the entity's mission), if deferred, shall be amortized over the period benefited.

340-954-45Other Presentation Matters

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340-954-45-1
Prepaid expenses, deposits, deferred expenses, and prepaid costs shall be classified as current or noncurrent as appropriate.

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