ASC 740-954

Health Care Entities

740 Income Taxes

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Source downloaded: 2026-09-10T01:21:20.942Z.Record version 8a6076deb92f. Effective date must be checked in the source.

In brief

IntermediateDisclosure Income taxes Industry-specific Not-for-profit

This subtopic is a very short industry-specific overlay to ASC 740 that applies only to not-for-profit, business-oriented health care entities. Its single substantive rule is a disclosure requirement: a tax-exempt health care entity must disclose its tax-exempt status (740-954-50-1). It adds no recognition or measurement guidance beyond the general income tax model.

Key points (4)

The subtopic provides guidance only on disclosure of income tax status for not-for-profit, business-oriented health care entities (740-954-05-1).
Scope follows the Overall health care Subtopic scope in Section 954-10-15, but is limited to not-for-profit, business-oriented health care entities (740-954-15-1; 740-954-15-2).
A tax-exempt entity within scope shall disclose its tax-exempt status (740-954-50-1).
No recognition, measurement, or presentation guidance is added here; the general ASC 740 model (including uncertain tax positions and any unrelated business income taxes) continues to apply.

For students. Easy exam point: the only requirement is to disclose tax-exempt status. The common misunderstanding is thinking tax-exempt status means ASC 740 is irrelevant — such entities can still have taxable subsidiaries, unrelated business income, and uncertain tax positions (including the risk of losing exemption) that require ASC 740 accounting.

tax-exempt status disclosure not-for-profit business-oriented health care entity income tax status industry-specific guidance unrelated business income scope limitation

Machine-generated study aid for ASC 740-954. Check the source paragraphs below.

740-954-05Overview and Background

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740-954-05-1

This Subtopic provides guidance on disclosures for income tax status for not-for-profit, business-oriented health care entities.

740-954-15Scope and Scope Exceptions

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Overall Guidance

740-954-15-1

This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 954-10-15, with specific entity qualifications noted below.

Entities

740-954-15-2

The guidance in this Subtopic applies only to not-for-profit, business-oriented health care entities.

740-954-50Disclosure

Source downloaded: 2026-09-10T01:21:20.942Z.Record version 5f9e33638e0e. Effective date must be checked in the source.

740-954-50-1

Tax-exempt entities shall disclose their tax-exempt status.