ASC

ASC 825-954

Health Care Entities

825 Financial Instruments

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In brief

IntermediateFinancial instrumentsPresentationIndustry-specificNot-for-profit

This subtopic gives industry-specific guidance on financial instruments for not-for-profit, business-oriented health care entities. Its single substantive rule is a presentation rule: when such an entity elects the fair value option, the resulting unrealized gains and losses must be reported inside the performance indicator (or within discontinued operations, as appropriate) rather than outside it.

Key points (4)
  • The Subtopic applies only to not-for-profit, business-oriented health care entities (825-954-15-2), and otherwise follows the scope in Section 954-10-15 (825-954-15-1).
  • Unrealized gains and losses on items for which the fair value option has been elected are reported within the performance indicator, or as part of discontinued operations if appropriate (825-954-45-1).
  • Paragraph 825-10-15-7 is cross-referenced for further guidance on eligible items for the fair value option (825-954-45-1).
  • The guidance is presentation-only; it does not change whether or how the fair value option may be elected under Subtopic 825-10.

For students. The performance indicator is the health care equivalent of income from continuing operations, and this rule keeps fair value option gains and losses inside it; a common mistake is assuming NFP health care entities can push these amounts below the performance indicator like other changes in net assets without donor restrictions.

fair value optionperformance indicatorunrealized gains and lossesnot-for-profit business-oriented health care entitydiscontinued operationsincome statement presentation

Machine-generated study aid for ASC 825-954. Check the source paragraphs below.

825-954-05Overview and Background

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825-954-05-1
This Subtopic provides guidance on financial instruments for not-for-profit, business-oriented health care entities.

825-954-15Scope and Scope Exceptions

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Overall Guidance

825-954-15-1
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

825-954-15-2
The guidance in this Subtopic applies only to not-for-profit, business-oriented health care entities.

825-954-45Other Presentation Matters

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825-954-45-1
Not-for-profit, business-oriented health care entities shall report unrealized gains and losses on items for which the fair value option has been elected within the performance indicator or as a part of discontinued operations, as appropriate. See paragraph 825-10-15-7 for further guidance.

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