Kế toán, kiểm toán - Chapter 12: Accounting for hospitals and other health care providers

Essentials of Accounting for Governmental and Not-for-Profit OrganizationsChapter 12 Accounting for Hospitals and Other Health Care ProvidersCopyright © 2015 McGraw-Hill Education. All rights reserved.Chapter 12 – Learning objectivesDescribe the reporting requirements of varying types of health care organizationsApply the accrual basis of accounting in the recording of typical transactions of a not-for-profit health care organizationPrepare the Financial Statements for a not-for-profit health care organizationOwnership Types Investor Owned:Human Inc. stock is widely held and the company is listed on the New York Stock ExchangePrivate Not-For-Profit:The Hospital is owned by the (Catholic) Archdiocese of AtlantaGovernment Owned: The NY City Health and Hospital Corporation was created by the NY state legislatureOwnership Types – Standard Setter Investor Owned:FASB – except standards specifically for not-for-profitsPrivate Not-For-Profit:FASB– particularly, standards for not-for-profits such as SFAS 116 & 117Government Owned:GASBStandard Setting AuthorityGASB - Category A GAAP Authority over government related hospitalsFASB - Private not-for-profit hospitalsMajor FASB Standards 93, 116,117, 124, 136, 164Investor owned hospitalsOther FASB StandardsAdditional guidance is provided by the AICPA Audit Guide for Health Care Organizations.- This is level B GAAP for government related, private not-for-profits, and business oriented What Types of Organizations?ClinicsMedical groupsIndividual practitionersEmergency careLaboratoriesSurgery care centersContinuing careHMOsHome health agenciesHospitalsNursing homesRehabilitation centersContractual AdjustmentsThird-party payers commonly receive discounts for services.The amount of these discounts are estimated and recorded at the time of serviceThey are reported as “contra-revenues”Contractual Adjustments vs Charity CareContractual Adjustment Entry:Contractual Adjustment . Dr Patient Accounts Rec. Cr Charity care (no expectation of receiving payment) No Journal entryHospital Financial StatementsBalance Sheet, Most use classified balance sheet Statement of Operations, Statement of Changes in Net Assets (or “Changes in Equity” if investor owned) Statement of Cash Flows and NotesDisplay Issues – Statement of OperationsPrivate not-for-profits and Government related entities must provide a Performance Indicator. This a measure of income which excludes:Equity transfers, Restricted Contributions, Contributions of LT assets, Most unrealized gains and losses, Restricted investment returns, andExtraordinary itemsDisplay Issues – Statement of Operations, cont’dPatient service revenues are shown net of contractual adjustments and the provision for bad debtsPatient service revenue excludes charity care (service provided where there is no expectation of payment).Display Issues – Statement of Operations, cont’dOperating revenues are often classified asNet patient service revenues, premium (capitation) revenue, and Other Revenue (parking lot, gift shop, cafeteria, and tuition).Unrestricted gifts may be treated as Operating or Nonoperating depending on policy.Display Issues – Balance SheetFASB vs. GASB equity accounts:FASB: unrestricted, temporarily restricted, and permanently restricted net assetsThe term restricted used only for donor restrictions; Assets whose use is limited is used to indicate board or bond covenant restrictions.GASB: unrestricted net position, restricted net position, and net investment in capital assetsComparison of Financial StatementsTwo statements take the place of the Statement of Activities:Statement of Operations:This is only for unrestricted itemsStatement of Changes in Net Assets:not-for-profits must show details of net changes for unrestricted, temporarily and permanently restrictedComparison of Financial StatementsStatement of Financial Position:Classified, similar for not-for-profit, Government, and commercial businesses except for the equity section:not-for-profit: unrestricted, temporarily and permanently restricted net assetsGovernment: unrestricted net position, restricted net position, and net investment in capital assets Business: paid in capital and retained earningsStatement of Cash Flows: Business and not-for-profits use the FASB format (3 sections); Governments use the GASB format (4 sections)