Accountants' Handbook, Volume Two, Special Industries and Special Topics, 12th Edition

Chapter 35

Health Care Organizations

Martha Garner, CPA

PwC LLP

35.1 The Health Care Industry

(a) Overview

(b) Not-for-Profit Health Care Entities

(c) Governmental Health Care Entities

(d) Investor-Owned Health Care Entities

35.2 Authoritative Pronouncements

(a) Generally Accepted Accounting Principles—Private Sector

(i) Securities and Exchange Commission Requirements

(ii) Definition of “Public” Not-for-Profit Entity

(b) Generally Accepted Accounting Principles—Governmental Sector

(c) AICPA Audit and Accounting Guide Health Care Entities

(d) Healthcare Financial Management Association Principles and Practices Board

35.3 Accounting Principles

(a) Classification and Reporting of Net Assets/Net Position

(i) Unrestricted Net Assets/Net Position

(ii) Restricted Net Assets/Net Position

(iii) Invested in Capital Assets, Net of Related Debt

(b) Noncurrent Cash/Claims to Cash

(c) Agency Transactions

(d) Revenue of Health Care Facilities

(e) Patient Service Revenue.³

(i) Estimating Patient Service Revenue Related to Governmental Programs

(ii) Reporting Charity Care Provided

(iii) Reporting the Provision for Bad Debts.⁴

(f) Concentration of Credit Risk

(g) Contributions

(i) General Guidance—Not- for-Profit Entities

(ii) Governmental Entities

(iii) Contributions Received through Affiliated Fundraising Foundations

(iv) Governmental Entities

(v) Contributions Established through Trusts

(h) Investments

(i) Nongovernmental Entities.⁸

(ii) Governmental Entities

(i) Derivatives

(i) Not-for-Profit ...