ASC 460-954
Health Care Entities
460 Guarantees
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This subtopic applies the general guarantee accounting model in Topic 460 to health care entities, following the scope of Subtopic 954-10. Its only substantive content points to Topic 460's guidance on minimum revenue guarantees, illustrated by a health care entity's guarantee of minimum revenue to a recruited physician.
Key points (4)
- This Subtopic provides guidance on accounting for guarantees for health care entities within the scope of Topic 460 (460-954-05-1).
- Scope and scope exceptions are the same as those in the Overall Subtopic at Section 954-10-15 (460-954-15-1).
- Guidance on minimum revenue guarantees is found in Topic 460 generally (460-954-55-1).
- Paragraph 460-10-55-11 illustrates a minimum revenue guarantee granted by a not-for-profit, business-oriented health care entity to a nonemployee physician recruited to move to the entity's geographic area to establish a practice (460-954-55-1).
For students. Physician recruitment income guarantees are a classic health care industry exam fact pattern: they are guarantees under Topic 460, so the entity recognizes a liability at inception at fair value, not merely a contingency accrued when payment becomes probable. The common error is treating the recruitment agreement as a compensation or contingency issue rather than a guarantee.
Machine-generated study aid for ASC 460-954. Check the source paragraphs below.
460-954-05Overview and Background
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460-954-15Scope and Scope Exceptions
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Overall Guidance
460-954-55Implementation Guidance and Illustrations
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