not-for-profit business-oriented health care entity

This Subtopic governs how not-for-profit, business-oriented health care entities present their statement of operations and statement of changes in net assets. Its central requirement is a clearly labeled "performance indicator" (e.g., revenues over expenses) reported in a statement that also shows total changes in net assets without donor restrictions, with a specified list of items — such as equity transfers, donor-restricted contributions, other comprehensive income items, and unrealized gains/losses on non-trading debt securities — required to be reported outside that indicator.

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.

ASC 815-954 tells not-for-profit, business-oriented health care entities how to apply derivative and hedge accounting. The core rule is parity with for-profit entities: items that would hit a for-profit's income from continuing operations must hit the NFP health care entity's performance indicator, and items excluded (e.g., amounts in other comprehensive income) must be excluded from the performance indicator. Because these entities need not present a separate equity component, the guidance substitutes tailored disclosures about the accumulated derivative gain or loss excluded from the performance indicator.

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.