The following table identifies the changes made to this Subtopic.
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section
954-10-15.
This Section provides recognition guidance for the following:
- a
- b
- c
- d
Related fundraising entities.
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.
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.
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 from the related recipient entity. See Example 2 in paragraphs
for an illustration of a health care foundation and the affiliated entities that it supports.
Paragraph superseded on 06/18/2012 after the end of the transition period stated in Accounting Standards Update No. 2010-23, Health Care Entities (Topic 954): Measuring Charity Care for Disclosure.
Paragraph superseded on 06/17/2013 after the end of the transition period stated in Accounting Standards Update No. 2011-07, Health Care Entities (Topic 954): Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities.