ASU 2011-07 — Health Care Entities (Topic 954)

The objective of this Update is to provide financial statement users with greater transparency about a health care entity's net patient service revenue, which is sometimes grossed-up and recognized at the time the services are rendered regardless of whether the entity expects to collect that amount, and the related allowance for doubtful accounts. This Update provides information to assist financial statement users in assessing an entity's sources of net patient service revenue and related changes in its allowance for doubtful accounts. The amendments require health care entities that recognize significant amounts of patient service revenue at the time the services are rendered even though they do not assess the patient's ability to pay to present the provision for bad debts related to patient service revenue as a deduction from patient service revenue (net of contractual allowances and discounts) on their statement of operations.

Issued: July 25, 2011