ASC

ASC 954-10

Overall

954 Health Care Entities

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In brief

IntroductoryIndustry-specificNot-for-profitFinancial statement presentation

ASC 954-10 is the Overall subtopic of the Health Care Entities Topic; it lists the industry Subtopics and defines which entities the Topic covers. The Topic supplies only incremental industry-specific guidance for investor-owned health care entities and not-for-profit, business-oriented health care entities, which must otherwise follow all other applicable GAAP (including Topic 958 for NFPs).

Key points (7)
  • Health care entities are those whose principal operations consist of providing (or agreeing to provide) health care services and that derive all or almost all revenues from the sale of goods or services, plus parent/holding companies whose primary activities are planning, organization, and oversight of such entities (954-10-15-1A).
  • The Topic lists covered entity types including clinics, medical group practices, continuing care retirement communities, HMOs and similar prepaid plans, home health agencies, hospitals, nursing homes, rehabilitation facilities, and integrated delivery systems (954-10-15-1B).
  • Guidance applies only if the entity is investor-owned (private equity interest, profit objective) or a not-for-profit, business-oriented entity (no ownership interests, essentially self-sustaining from fees charged for goods and services) (954-10-05-2; 954-10-15-2).
  • Not-for-profit, non-business-oriented entities are voluntary health and welfare entities and fall within Topic 958 rather than this Topic (954-10-15-3).
  • The Subtopics in Topic 954 provide only incremental industry-specific guidance; entities in scope must also comply with applicable guidance outside the Topic (954-10-15-1).
  • Not-for-profit, business-oriented health care entities also apply Topic 958 guidance on contributions, transfers of assets and agency transactions, split-interest agreements, NFP financial statements, promises to give, NFP mergers and acquisitions, consolidation, and services received from personnel of an affiliate (954-10-05-3).
  • Topic 954 also provides incremental guidance for investor-owned health care entities (954-10-05-4).

For students. This is a scoping subtopic: the exam trap is assuming Topic 954 replaces general GAAP, when it only adds incremental guidance, and assuming all NFP health care entities are here — non-business-oriented (voluntary health and welfare) entities go to Topic 958.

health care entityinvestor-owned health care entitynot-for-profit business-oriented entityincremental industry guidancevoluntary health and welfare entitycontinuing care retirement communityintegrated delivery systemscope

Machine-generated study aid for ASC 954-10. Check the source paragraphs below.

954-10-00Status

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954-10-05Overview and Background

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954-10-05-1
The Health Care Entities Topic includes the following Subtopics relating specifically to entities in the health care industry:
  1. a
    Overall
  2. b
    Presentation of Financial Statements
  3. c
    Balance Sheet
  4. d
    Income Statement
  5. e
    Segment Reporting
  6. f
    Cash and Cash Equivalents
  7. g
    Receivables
  8. h
    Subparagraph superseded by Accounting Standards Update No. 2016-01.
  9. i
    Investments—Other
  10. j
    Other Assets and Deferred Costs
  11. k
    Property, Plant, and Equipment
  12. l
    Liabilities
  13. m
    Subparagraph superseded by Accounting Standards Update No. 2014-09.
  14. n
    Commitments
  15. o
    Contingencies
  16. p
    Guarantees
  17. q
    Debt
  18. r
    Revenue Recognition—Charity Care and Related Fundraising Entities
  19. s
    Other Expenses
  20. t
    Income Taxes
  21. tt
    Business Combinations (Mergers and Acquisitions)
  22. u
    Consolidation
  23. v
    Derivatives and Hedging
  24. w
    Financial Instruments.
954-10-05-2
Within the Health Care Entities Topic, health care entities usually can be classified into the following categories on the basis of their operating characteristics:
  1. a
    Investor-owned health care entities. These are owned by investors or others with a private equity interest and provide goods or services with the objective of making a profit.
  2. b
    Not-for-profit, business-oriented entities. These are characterized by no ownership interests and essentially are self-sustaining from fees charged for goods and services. The fees charged by such entities generally are intended to help the entity maintain its self-sustaining status rather than to maximize profits for the owner's benefit. Such entities often are exempt from federal income taxes and may receive contributions of relatively small amounts from resource providers that do not expect commensurate or proportionate pecuniary return.

Not-for-Profit, Business-Oriented Health Care Entities

954-10-05-3
This Topic provides specific incremental reporting guidance for not-for-profit, business-oriented health care entities. The guidance in Topic 958 applies to all not-for-profit entities (NFPs), regardless of whether the entity is essentially self-sustaining from fees charged for goods and services. The following Subtopics, among others in that Topic, provide guidance that is applicable to not-for-profit, business-oriented health care entities:
  1. a
    Contributions (see the Contributions Received Subsections of Subtopic 958-605), which include all of the following:
    1. 1
      Permanent endowments
    2. 2
      Gifts in kind
    3. 3
      Contributed utilities, facilities, or use of long-lived assets.
  2. b
    Transfers to an NFP or charitable trust that raises or holds contributions for others (see the Transfers of Assets Subsections of Subtopic 958-605)
  3. c
    Contributions received by agents, trustees, and intermediaries (see the Transfers of Assets Subsections of Subtopic 958-605)
  4. d
    Split-interest agreements (see Subtopic 958-30)
  5. e
    Financial statements of NFPs (see Topic 958), which include all of the following:
    1. 1
      Presentation in financial statements (see Subtopic 958-205)
    2. 2
      Statement of financial position (see Subtopic 958-210)
    3. 3
      Statement(s) of operations and changes in net assets (see Subtopic 958-220)
    4. 4
      Statement of cash flows (see Subtopic 958-230).
  6. f
    Promises to give (see Subtopic 958-310)
  7. ff
    Business combinations (see Subtopic 958-805), which include all of the following:
    1. 1
      Mergers of not-for-profit entities
    2. 2
      Acquisitions by not-for-profit entities
  8. g
    Consolidation (see Subtopic 958-810)
  9. h
    Services received from personnel of an affiliate (see Subtopic 958-720).

Investor-Owned Health Care Entities

954-10-05-4
The guidance in this Topic also provides incremental guidance for investor-owned health care entities.

954-10-15Scope and Scope Exceptions

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Overall Guidance

954-10-15-1
The Subtopics within the Health Care Entities Topic only provide incremental industry-specific guidance for the entities defined in the Scope Section or as further defined in the individual Health Care Entities Subtopics. Entities within the scope of this Topic shall also comply with the applicable guidance not included in this Topic.

Entities

954-10-15-1A
The Health Care Entities Topic applies to health care entities, which are the following types of entities:
  1. a
    Entities whose principal operations consist of providing or agreeing to provide health care services and that derive all or almost all of their revenues from the sale of goods or services
  2. b
    Entities whose primary activities are the planning, organization, and oversight of such entities, such as parent or holding companies of health care providers.
954-10-15-1B
The Health Care Entities Topic applies to the following types of health care entities:
  1. a
    Clinics, medical group practices, individual practice associations, individual practitioners, emergency care facilities, laboratories, surgery centers, and other ambulatory care entities
  2. b
    Continuing care retirement communities
  3. c
    Health maintenance organizations and similar prepaid health care plans
  4. d
    Home health agencies
  5. e
    Hospitals
  6. f
    Nursing homes that provide skilled, intermediate, and less intensive levels of health care
  7. g
    Drug and alcohol rehabilitation centers and other rehabilitation facilities
  8. h
    Integrated delivery systems that include one or more of the above types of entities.
954-10-15-2
The Health Care Entities Topic provides guidance for entities described in the previous paragraph if they are either:
  1. a
    Investor-owned health care entities
  2. b
    Not-for-profit, business-oriented entities.
See Section 954-10-05 for a description of these entities.
954-10-15-3
Not-for-profit, non-business-oriented entities are voluntary health and welfare entities as defined in Topic 958. Such entities are within the scope of that Topic rather than this Topic.

Related subtopics