# ASC 440-954-25: Commitments — Health Care Entities — 25 Recognition

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/440/954/#25-recognition)

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## ASC 440-954-25: 25 Recognition

[Read section](https://asc.understandingaccounting.org/asc/440/954/#25-recognition)

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#### Continuing Care Retirement Community

##### [440-954-25-1](https://asc.understandingaccounting.org/asc/440/954/#440-954-25-1)

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The continuing care retirement community assumes a risk in estimating the cost of future services and the use of facilities. Although many continuing care retirement communities are allowed contractually to increase periodic fees, some contracts may restrict increases in periodic fees and require continuing services without additional compensation.

##### [440-954-25-2](https://asc.understandingaccounting.org/asc/440/954/#440-954-25-2)

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Paragraph [954-440-35-1](https://asc.understandingaccounting.org/asc/440/954/#440-954-35-1) requires that the obligation of a continuing care retirement community to provide future services and the use of facilities to current residents be calculated annually to determine whether a liability shall be recognized in the financial statements.

##### [440-954-25-3](https://asc.understandingaccounting.org/asc/440/954/#440-954-25-3)

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See Example 1 (paragraph [954-440-55-1](https://asc.understandingaccounting.org/asc/440/954/#440-954-55-1)) for an illustration of this guidance.