# ASC 720-954-25: Other Expenses — Health Care Entities — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/720/954/#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): 2026-09-10T01:12:40.353Z to 2026-09-10T01:12:40.353Z Record version: sha256:4c291e0032ac79f5866d4931960cf5fd914596f7ffce64a5b5e4b42d77073de1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-954-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/720/954/#25-recognition) SEC content: no #### Retrospectively Rated Premiums ##### [720-954-25-1](https://asc.understandingaccounting.org/asc/720/954/#720-954-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:12:40.353Z to 2026-09-10T01:12:40.353Z Record version: sha256:c27f2ab352cf2d56696f9d932ecaf894302f545fad0242bc174b6e7e3d61c52e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A health care entity with a retrospectively rated insurance policy whose ultimate premium is based primarily on the health care entity's loss experience shall account for the minimum premium as an expense over the period of coverage under the policy. Insurance recoveries from a retrospectively rated insurance policy whose ultimate premium is based primarily on the health care entity's loss experience shall not be recognized until the estimated losses exceed the stipulated maximum premium. ##### [720-954-25-2](https://asc.understandingaccounting.org/asc/720/954/#720-954-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:12:40.353Z to 2026-09-10T01:12:40.353Z Record version: sha256:edffbbd6db5071a4d60931362faa5caacabab275eabf8f9bea01797096378dd3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A health care entity insured under a retrospectively rated policy whose ultimate premium is based primarily on the experience of a group of health care entities shall accrue additional premiums or refunds on the basis of the group's experience to date, which includes a provision for the ultimate cost of asserted and unasserted claims before the financial statement date, whether reported or unreported. #### Malpractice Losses ##### [720-954-25-3](https://asc.understandingaccounting.org/asc/720/954/#720-954-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:12:40.353Z to 2026-09-10T01:12:40.353Z Record version: sha256:d425dabb10f8eb8d25035d600a4523f3c8c258daad8a7efc00a11143740b7060 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An accrual for malpractice losses shall be based on estimated ultimate losses and costs associated with settling claims. See paragraphs [954-450-25-2 through 2A](https://asc.understandingaccounting.org/asc/450/954/#450-954-25-2) for factors to consider when determining the amount of the accrual. ##### [720-954-25-4](https://asc.understandingaccounting.org/asc/720/954/#720-954-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:12:40.353Z to 2026-09-10T01:12:40.353Z Record version: sha256:441b46ded55c52a4a71a17a65a60637d25f9657b182d949650ec38f5752cdfc3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). #### Claims-Made Insurance Policies ##### [720-954-25-4A](https://asc.understandingaccounting.org/asc/720/954/#720-954-25-4A) Pending content: no Source downloaded (UTC): 2026-09-10T01:12:40.353Z to 2026-09-10T01:12:40.353Z Record version: sha256:68154c5e5337834a0f79e2a8267d647e845f0992db7d425f17790065faa689b4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Claims Made Contract Subsections of Subtopic 720-20 apply if a health care entity purchases a claims-made insurance policy. As discussed in paragraph [720-20-25-14](https://asc.understandingaccounting.org/asc/720/20/#720-20-25-14), insured entities (except as discussed in Section 944-20-15), including those that use a claims-made approach for insuring certain risks, recognize a liability for the probable losses from incurred but not reported claims and incidents if the loss is both probable and reasonably estimable. Consequently, a health care entity that is insured under a claims-made insurance policy recognizes the estimated cost of claims and incidents not reported to the insurance carrier, in accordance with Subtopic 954-450. #### Trust Funds ##### [720-954-25-5](https://asc.understandingaccounting.org/asc/720/954/#720-954-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:12:40.353Z to 2026-09-10T01:12:40.353Z Record version: sha256:f76f1ea8dcfcb5a5424f36ba2803584d28542f2941b386572570df43148dce29 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity that participates in a common trust fund and forfeits its rights to any excess funding shall expense its contributions and account for its participation in the trust fund based on the type of coverage obtained (for example, occurrence basis, claims-made, or retrospectively rated). ##### [720-954-25-6](https://asc.understandingaccounting.org/asc/720/954/#720-954-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:12:40.353Z to 2026-09-10T01:12:40.353Z Record version: sha256:c15d18e22c53e2ed7f5ef2213b18e811b30b4c3bc2f8474c81f5f819ea8e5603 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/). ##### [720-954-25-7](https://asc.understandingaccounting.org/asc/720/954/#720-954-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:12:40.353Z to 2026-09-10T01:12:40.353Z Record version: sha256:f073161a5933be7b0e3b6e4159361699910a65e4d924158939bb02dbc333c7ab 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/).