# ASC 605-954-25: Revenue Recognition — Health Care Entities — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/605/954/#25-recognition) 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. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T00:50:53.595Z to 2026-09-10T00:50:53.595Z Record version: sha256:a21076caff2dbb37317d8f1a29d3a8054e1c2d87fff97f233d1c2e89827748f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 605-954-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/605/954/#25-recognition) SEC content: no ##### [605-954-25-1](https://asc.understandingaccounting.org/asc/605/954/#605-954-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:50:53.595Z to 2026-09-10T00:50:53.595Z Record version: sha256:753ed88b2232ea884887d5403432f2c3b6f6e7cb48598c551a84a087705c909a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section provides recognition guidance for the following: 1. a [Subparagraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). 2. b [Subparagraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). 3. c [Charity care](https://asc.understandingaccounting.org/glossary/c/#charity-care "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.") 4. d Related fundraising entities. ##### [605-954-25-2](https://asc.understandingaccounting.org/asc/605/954/#605-954-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:50:53.595Z to 2026-09-10T00:50:53.595Z Record version: sha256:4578729a0445b85542637b99005b782c9008d6051e623d5d28d7d53b55cadd5b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [605-954-25-3](https://asc.understandingaccounting.org/asc/605/954/#605-954-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:50:53.595Z to 2026-09-10T00:50:53.595Z Record version: sha256:0397e06d2a41a9f2677904217582636b68bb7090be6ab561d744b3b0840a19a1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [605-954-25-4](https://asc.understandingaccounting.org/asc/605/954/#605-954-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:50:53.595Z to 2026-09-10T00:50:53.595Z Record version: sha256:34264038f5358db1c2d244087c26625e5609b8cceb2dd12c3079bb4ca3836e87 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [605-954-25-5](https://asc.understandingaccounting.org/asc/605/954/#605-954-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:50:53.595Z to 2026-09-10T00:50:53.595Z Record version: sha256:ecdbff37263f91f04ee6aaa90cde76557fa6f78d18ec6d80964307df0f1d77c4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [605-954-25-6](https://asc.understandingaccounting.org/asc/605/954/#605-954-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:50:53.595Z to 2026-09-10T00:50:53.595Z Record version: sha256:9a6a40ee3a0d4c1d790add3f43ad67d7f2fde44d54711def3c43def7a292f494 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [605-954-25-7](https://asc.understandingaccounting.org/asc/605/954/#605-954-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:50:53.595Z to 2026-09-10T00:50:53.595Z Record version: sha256:c64e52d5096c5b810f88b69594c549f33d956f4ffcd777c2f829fde4bc6d8190 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [605-954-25-8](https://asc.understandingaccounting.org/asc/605/954/#605-954-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:50:53.595Z to 2026-09-10T00:50:53.595Z Record version: sha256:2aa401ece2c498216f4bd6e168e6dc04b81db91b2006c0ccb080ddef6b2d0927 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [605-954-25-9](https://asc.understandingaccounting.org/asc/605/954/#605-954-25-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:50:53.595Z to 2026-09-10T00:50:53.595Z Record version: sha256:23859ef18762885421820d8b97b4a0bb198622e34b0616585bf8ad74ebf78a95 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). #### Charity Care ##### [605-954-25-10](https://asc.understandingaccounting.org/asc/605/954/#605-954-25-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:50:53.595Z to 2026-09-10T00:50:53.595Z Record version: sha256:bea57fa833dc2927a19d2e53f06396268c70b7731d9cf525f5902cba8b8d4c11 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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 meets the entity's charity care criteria shall be recognized as charity. ##### [605-954-25-11](https://asc.understandingaccounting.org/asc/605/954/#605-954-25-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:50:53.595Z to 2026-09-10T00:50:53.595Z Record version: sha256:4140a3d05c2795980fe6cba643c54d8b7b6ea66239ebfe98fa5eec6e21d2957e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. #### Related Fundraising Entities ##### [605-954-25-12](https://asc.understandingaccounting.org/asc/605/954/#605-954-25-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:50:53.595Z to 2026-09-10T00:50:53.595Z Record version: sha256:98bd9ff34af194929d6686204fba96599f1fc7270b35d354d0fbda54445db4b9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. 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 [contribution](https://asc.understandingaccounting.org/glossary/c/#contribution "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.") from the related recipient entity. See Example 2 in paragraphs [958-20-55-8 through 55-13](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-8) for an illustration of a health care foundation and the affiliated entities that it supports.