# ASC 954-10-05: Health Care Entities — Overall — 05 Overview and Background Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/954/10/#05-overview-and-background) 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): 2026-09-10T02:20:59.408Z to 2026-09-10T02:20:59.408Z Record version: sha256:24ee34ce0dd7ae5dff91160ea394a891303fedfe7d978af72fac81d505bb5de1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 954-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/954/10/#05-overview-and-background) SEC content: no ##### [954-10-05-1](https://asc.understandingaccounting.org/asc/954/10/#954-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:59.408Z to 2026-09-10T02:20:59.408Z Record version: sha256:a11d11a84bd366c9d3986ab0d09ca2d3f0a8203cdd2d17135bfc4c40af4f2b04 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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 h [Subparagraph superseded by Accounting Standards Update No. 2016-01](https://asc.understandingaccounting.org/updates/asu-2016-01/). 9.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 m [Subparagraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). 14.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](https://asc.understandingaccounting.org/asc/954/10/#954-10-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:59.408Z to 2026-09-10T02:20:59.408Z Record version: sha256:f54c1e839307f9e17ca3d7c075c12049779978eaab7ffd0afbf0f4768494a317 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/glossary/c/#contribution "An unconditional transfer of cash or other assets, as well as unconditional promises to give, to an entity or a reduction, settlement, or cancellation of its liabilities in a voluntary nonreciprocal transfer by another entity acting other than as an owner. Those characteristics distinguish contributions from:Exchange transactions, which are reciprocal transfers in which each party receives and sacrifices approximately commensurate valueInvestments by owners and distributions to owners, which are nonreciprocal transfers between an entity and its ownersOther nonreciprocal transfers, such as impositions of taxes or legal judgments, fines, and thefts, which are not voluntary transfers. In a contribution transaction, the resource provider often receives value indirectly by providing a societal benefit although that benefit is not considered to be of commensurate value. In an exchange transaction, the potential public benefits are secondary to the potential direct benefits to the resource provider. The term contribution revenue is used to apply to transactions that are part of the entity's ongoing major or central activities (revenues), or are peripheral or incidental to the entity (gains). See also Inherent Contribution and Conditional Contribution.") 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](https://asc.understandingaccounting.org/asc/954/10/#954-10-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:59.408Z to 2026-09-10T02:20:59.408Z Record version: sha256:eadcf3d300483fa86028a9d27660f79593c22788fe17b26f9ce8e7407a87e802 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (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](https://asc.understandingaccounting.org/glossary/a/#affiliate "A party that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with an entity. See Control.") (see Subtopic 958-720). #### Investor-Owned Health Care Entities ##### [954-10-05-4](https://asc.understandingaccounting.org/asc/954/10/#954-10-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:59.408Z to 2026-09-10T02:20:59.408Z Record version: sha256:b6d53ff30e0f31e3f591638d40212f9ca3efda88719ac018a7edc014360b99a6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Topic also provides incremental guidance for investor-owned health care entities.