April 2010

FASB Issues Health Care Proposals

From Journal of Accountancy.

FASB on Friday issued two exposure drafts that would change accounting for health care organizations. One proposal would require that the measurement of charity care for disclosure purposes by health care providers be based on the direct and indirect costs of providing the charity care. The second proposal is aimed at how organizations account for medical malpractice and similar liabilities and related insurance payouts.

In Proposed Accounting Standards Update, Health Care Entities (Topic 954): Measuring Charity Care for Disclosure (a consensus of the FASB Emerging Issues Task Force), FASB says that existing guidance does not dictate a specific measurement basis of charity care for disclosure purposes. Some entities determine their charity care disclosures on the basis of a cost measurement, while others use a revenue measurement.

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