continuing care retirement community

This subtopic governs how health care entities, including not-for-profit business-oriented health care entities, present their balance sheets. The general rule is a classified (current/noncurrent) balance sheet under Section 210-10-45, except that a continuing care retirement community may instead sequence assets by nearness of conversion to cash and liabilities by nearness of maturity. It also specifies that contractually limited (non-donor) assets stay in net assets without donor restrictions, that interfund balances are eliminated, and that restricted or segregated cash is excluded from current assets.

ASC 430-954 formerly provided the deferred revenue guidance for health care entities, principally continuing care retirement communities (CCRCs) accounting for nonrefundable advance (entrance) fees and refundable advance fees. Every paragraph in the subtopic has been superseded by ASU 2014-09 (Revenue from Contracts with Customers), and the transition paragraph 430-954-65-1 was superseded on 06/26/2015 following ASU 2012-01. The subtopic therefore contains no operative guidance; deferred revenue for health care entities is now addressed under ASC 606 and ASC 954-405/954-606.

This subtopic governs the commitment of a continuing care retirement community (CCRC) to provide future services and the use of facilities to current residents under continuing-care contracts. The CCRC must recalculate that obligation annually and, if advance fees plus periodic fees are insufficient to cover the cost of future services and facilities, record a liability measured actuarially at the present value of future net cash flows, less deferred revenue (contract liability), plus depreciation of facilities to be charged to those contracts and any unamortized incremental costs of obtaining a contract. Extensive note disclosure about the contracts, liability, discount rate, escrow requirements, and refund policy is required.

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).