{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/605/954/#25-recognition","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"605","topic_title":"Revenue Recognition","subtopic":"605-954","subtopic_title":"Health Care Entities","section":{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"605-954-25-1","para":"25-1","html":"<div class=\"asc-body\"><div class=\"norm-text\">This Section provides recognition guidance for the following:<ol class=\"ol-norm\"><li class=\"li-norm\"><span class=\"linum\">a</span><div class=\"p\"><a href=\"/updates/asu-2014-09/\" class=\"xref\">Subparagraph superseded by Accounting Standards Update No. 2014-09</a>.</div></li><li class=\"li-norm\"><span class=\"linum\">b</span><div class=\"p\"><a href=\"/updates/asu-2014-09/\" class=\"xref\">Subparagraph superseded by Accounting Standards Update No. 2014-09</a>.</div></li><li class=\"li-norm\"><span class=\"linum\">c</span><div class=\"p\"><a href=\"/glossary/c/#charity-care\" class=\"term\" title=\"Charity care represents health care services that are provided but are never expected to result in cash flows. Charity care is provided to a patient with demonstrated inability to pay. Each entity establishes its own criteria for charity care consistent with its mission statement and financial ability.\"><span>Charity care</span></a></div></li><li class=\"li-norm\"><span class=\"linum\">d</span><div class=\"p\">Related fundraising entities.</div></li></ol></div> </div>","snippet":"This Section provides recognition guidance for the following:\n(a) Subparagraph superseded by Accounting Standards Update No. 2014-09.\n(b) Subparagraph superseded by Accounting Standards Update No. 2014-09.\n(c) Charity ca…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:753ed88b2232ea884887d5403432f2c3b6f6e7cb48598c551a84a087705c909a","downloaded_from":"2026-09-10T00:50:53.595Z","last_downloaded_at":"2026-09-10T00:50:53.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval 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timestamps","source_key":"1943274/2147479190","source_sha256":"159db65a302ed371e47a8f54173498d75bf5da83aff8d827b10df1a4e3f8b4e4"}},{"citation":"605-954-25-4","para":"25-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <a href=\"/updates/asu-2014-09/\" class=\"xref\">Paragraph superseded by Accounting Standards Update No. 2014-09</a>.</div> </div>","snippet":"Paragraph superseded by Accounting Standards Update No. 2014-09.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:34264038f5358db1c2d244087c26625e5609b8cceb2dd12c3079bb4ca3836e87","downloaded_from":"2026-09-10T00:50:53.595Z","last_downloaded_at":"2026-09-10T00:50:53.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479190","source_sha256":"159db65a302ed371e47a8f54173498d75bf5da83aff8d827b10df1a4e3f8b4e4"}},{"citation":"605-954-25-5","para":"25-5","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <a href=\"/updates/asu-2014-09/\" class=\"xref\">Paragraph superseded by Accounting Standards Update No. 2014-09</a>.</div> </div>","snippet":"Paragraph superseded by Accounting Standards Update No. 2014-09.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ecdbff37263f91f04ee6aaa90cde76557fa6f78d18ec6d80964307df0f1d77c4","downloaded_from":"2026-09-10T00:50:53.595Z","last_downloaded_at":"2026-09-10T00:50:53.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval 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timestamps","source_key":"1943274/2147479190","source_sha256":"159db65a302ed371e47a8f54173498d75bf5da83aff8d827b10df1a4e3f8b4e4"}},{"citation":"605-954-25-8","para":"25-8","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <a href=\"/updates/asu-2014-09/\" class=\"xref\">Paragraph superseded by Accounting Standards Update No. 2014-09</a>.</div> </div>","snippet":"Paragraph superseded by Accounting Standards Update No. 2014-09.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2aa401ece2c498216f4bd6e168e6dc04b81db91b2006c0ccb080ddef6b2d0927","downloaded_from":"2026-09-10T00:50:53.595Z","last_downloaded_at":"2026-09-10T00:50:53.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479190","source_sha256":"159db65a302ed371e47a8f54173498d75bf5da83aff8d827b10df1a4e3f8b4e4"}},{"citation":"605-954-25-9","para":"25-9","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <a href=\"/updates/asu-2014-09/\" class=\"xref\">Paragraph superseded by Accounting Standards Update No. 2014-09</a>.</div> </div>","snippet":"Paragraph superseded by Accounting Standards Update No. 2014-09.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:23859ef18762885421820d8b97b4a0bb198622e34b0616585bf8ad74ebf78a95","downloaded_from":"2026-09-10T00:50:53.595Z","last_downloaded_at":"2026-09-10T00:50:53.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479190","source_sha256":"159db65a302ed371e47a8f54173498d75bf5da83aff8d827b10df1a4e3f8b4e4"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0d2cf8621228c54bd08318c43516297a4084220c439a87f2f62c947797a71f60","downloaded_from":"2026-09-10T00:50:53.595Z","last_downloaded_at":"2026-09-10T00:50:53.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479190","source_sha256":"159db65a302ed371e47a8f54173498d75bf5da83aff8d827b10df1a4e3f8b4e4"}},{"block":null,"heading":"Charity Care","paragraphs":[{"citation":"605-954-25-10","para":"25-10","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_28A32650-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Charity care does not qualify for recognition as revenue in the financial statements. </span></span> <span class=\"sfragment\" id=\"sfr_28A3274F-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Distinguishing charity care from bad-debt expense requires the exercise of judgment. </span></span> <span class=\"sfragment\" id=\"sfr_28A32823-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Only the portion of a patient's account that meets the entity's charity care criteria shall be recognized as charity. </span></span> </div> </div>","snippet":"Charity care does not qualify for recognition as revenue in the financial statements. Distinguishing charity care from bad-debt expense requires the exercise of judgment. Only the portion of a patient's account that meet…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bea57fa833dc2927a19d2e53f06396268c70b7731d9cf525f5902cba8b8d4c11","downloaded_from":"2026-09-10T00:50:53.595Z","last_downloaded_at":"2026-09-10T00:50:53.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479190","source_sha256":"159db65a302ed371e47a8f54173498d75bf5da83aff8d827b10df1a4e3f8b4e4"}},{"citation":"605-954-25-11","para":"25-11","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_28A32902-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Although it is not necessary for the entity to make this determination on admission or registration of an individual, at some point the entity must determine that the individual meets the established criteria for charity care. </span></span> </div> </div>","snippet":"Although it is not necessary for the entity to make this determination on admission or registration of an individual, at some point the entity must determine that the individual meets the established criteria for charity…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4140a3d05c2795980fe6cba643c54d8b7b6ea66239ebfe98fa5eec6e21d2957e","downloaded_from":"2026-09-10T00:50:53.595Z","last_downloaded_at":"2026-09-10T00:50:53.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479190","source_sha256":"159db65a302ed371e47a8f54173498d75bf5da83aff8d827b10df1a4e3f8b4e4"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:507162f27fd46be1997f45dfcfcf9c4a763f31963d2051522a0384554d18f6df","downloaded_from":"2026-09-10T00:50:53.595Z","last_downloaded_at":"2026-09-10T00:50:53.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479190","source_sha256":"159db65a302ed371e47a8f54173498d75bf5da83aff8d827b10df1a4e3f8b4e4"}},{"block":null,"heading":"Related Fundraising Entities","paragraphs":[{"citation":"605-954-25-12","para":"25-12","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_28A329DF-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Distributions from a financially interrelated recipient entity to a nongovernmental health care entity that it supports shall generally be reported by the health care entity as a reduction of its interest in the recipient entity. </span></span> <span class=\"sfragment\" id=\"sfr_28A32AAE-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">However, if the distribution is made from net assets that are not includable in that interest because the health care entity does not have rights to them (that is, the recipient entity can determine to whom the assets will be distributed), the health care entity shall report a <a href=\"/glossary/c/#contribution\" class=\"term\" title=\"An unconditional transfer of cash or other assets, as well as unconditional promises to give, to an entity or a reduction, settlement, or cancellation of its liabilities in a voluntary nonreciprocal transfer by another entity acting other than as an owner. Those characteristics distinguish contributions from:Exchange transactions, which are reciprocal transfers in which each party receives and sacrifices approximately commensurate valueInvestments by owners and distributions to owners, which are nonreciprocal transfers between an entity and its ownersOther nonreciprocal transfers, such as impositions of taxes or legal judgments, fines, and thefts, which are not voluntary transfers. In a contribution transaction, the resource provider often receives value indirectly by providing a societal benefit although that benefit is not considered to be of commensurate value. In an exchange transaction, the potential public benefits are secondary to the potential direct benefits to the resource provider. The term contribution revenue is used to apply to transactions that are part of the entity's ongoing major or central activities (revenues), or are peripheral or incidental to the entity (gains). See also Inherent Contribution and Conditional Contribution.\"><span>contribution</span></a> from the related recipient entity. </span></span>See Example 2 in paragraphs <div class=\"xref-range displayInline\"><a href=\"/asc/958/20/#958-20-55-8\" class=\"xref\">958-20-55-8 through 55-13</a></div> for an illustration of a health care foundation and the affiliated entities that it supports.</div> </div>","snippet":"Distributions from a financially interrelated recipient entity to a nongovernmental health care entity that it supports shall generally be reported by the health care entity as a reduction of its interest in the recipien…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:98bd9ff34af194929d6686204fba96599f1fc7270b35d354d0fbda54445db4b9","downloaded_from":"2026-09-10T00:50:53.595Z","last_downloaded_at":"2026-09-10T00:50:53.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479190","source_sha256":"159db65a302ed371e47a8f54173498d75bf5da83aff8d827b10df1a4e3f8b4e4"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e98d223c8edeedff285b002c885d1b26839b741d6ddf99ce29a083312da1198a","downloaded_from":"2026-09-10T00:50:53.595Z","last_downloaded_at":"2026-09-10T00:50:53.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479190","source_sha256":"159db65a302ed371e47a8f54173498d75bf5da83aff8d827b10df1a4e3f8b4e4"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a21076caff2dbb37317d8f1a29d3a8054e1c2d87fff97f233d1c2e89827748f5","downloaded_from":"2026-09-10T00:50:53.595Z","last_downloaded_at":"2026-09-10T00:50:53.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479190","source_sha256":"159db65a302ed371e47a8f54173498d75bf5da83aff8d827b10df1a4e3f8b4e4"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a21076caff2dbb37317d8f1a29d3a8054e1c2d87fff97f233d1c2e89827748f5","downloaded_from":"2026-09-10T00:50:53.595Z","last_downloaded_at":"2026-09-10T00:50:53.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479190","source_sha256":"159db65a302ed371e47a8f54173498d75bf5da83aff8d827b10df1a4e3f8b4e4"}}