Health Care Entities Revenue Recognition Task Force 


AICPA Revenue Recognition Task Forces are charged with developing revenue recognition implementation issues that will provide helpful hints and illustrative examples for how to apply the new Revenue Recognition Standard.

Task Force Members:

  • Kimberly McKay, BKD, LLP (Chair)
  • Mike Breen, KPMG LLP
  • Cline Comer, CliftonLarsonAllen LLP (retired)
  • Gordon Edwards, Marshfield Clinic
  • Martha Garner, PricewaterhouseCoopers LLP
  • Nanda Gopal, BDO USA, LLP
  • John Hawryluk, KPMG LLP
  • Chuck Heimerdinger, Ernst & Young LLP
  • Brian Murray, Crowe Horwath LLP
  • Susan Paulsen, Paulsen, Megaard & Co. PS
  • Barb Potts, Ascension Health Alliance
  • Chris Pritchard, Moss Adams LLP
  • Mark Ross, Baker Tilly Virchow Krause, LLP
  • Mike Sorelle, Grant Thornton LLP
  • Don Street, HCA Holdings, Inc.
  • Karen Van Compernolle, Deloitte LLP
  • Dan Vandenberghe, McGladrey LLP
  • Alfonse Upshaw, Kaiser Foundation Health Plan, Inc.
Staff Contact: Andy Mrakovcic, amrakovcic@aicpa.org

IDENTIFIED REVENUE RECOGNITION IMPLEMENTATION ISSUES

Below is a list of potential revenue recognition implementation issues identified by the Health Care Entities Revenue Recognition Task Force. The list will be updated as the task force continues it discussions. Full revenue recognition implementation issues will be posted below for informal comments after review by the AICPA Financial Reporting Executive Committee (FinREC).

The Task Force has removed and/or addressed selected implementation issues included in the original plan. They have retained the original issue #s for the table below.

Issue # Description of Implementation Issue Status
1 Consideration of the following regarding self-pay balances:
1a. & 1b.
Application of step 1 (determine if there is a contract) and step 3 (determine the transaction price) for healthcare services provided to self-pay patients, including uninsured patient balances and self-pay patient balances arising from co-payments and deductibles.
This implementation issue will discuss evaluating whether a contract exists and what (including consideration of implicit price concessions) the transaction price is to arrangements for health care services provided to self-pay patients and balances arising from co-payments and deductibles.
Submitted to FinREC - May 2016
1c. Implicit price concessions
This implementation issue, being submitted to the TRG, provides two views over the initial accounting for implicit price concessions for services provided to uninsured patients and two views for the subsequent accounting for these types of contracts and whether changes in the estimates of variable consideration represent changes in price concessions or impairments.
Submitted to FASB TRG
2 Application of the portfolio approach to contracts with patient
This implementation issue will discuss how to apply the portfolio approach to revenue from self-pay patients and third party payors.
Submitted to FinREC - May 2016
3
CCR: Identifying and satisfying the performance obligation(s) and recognizing the monthly/periodic fees and nonrefundable entrance fees under Type A or “life care” contracts for continuing care retirement communities
This implementation issue will discuss the performance obligations under a typical Type A (life care) continuing care retirement community (CCRC) resident agreement and, given these performance obligations, how a Type A CCRC will estimate a transaction price and recognize nonrefundable entrance fees and monthly/periodic fees received from residents under the new model.
Submitted to AICPA RRWG
4 CCR: Identifying the performance obligation(s) and recognizing the performance obligation(s) to provide future services and use of facilities
This implementation issue will describe the changes to a continuing care retirement community’s calculation of the obligation to provide future services and use of facilities as a result of the new model.
Submitted to AICPA RRWG
5 Significant financing component - CCRC contracts, and patient and third-party payor amounts in arrears
6
Disclosure requirements of ASU No. 2014-09
7
Accounting for contract costs
This implementation issue will discuss how health care organizations will account for certain costs of acquiring and fulfilling contracts under the new model.
Submitted to FinREC - September 2015
8
Consideration of FASB ASC 606, Revenue from Contracts with Customers, for third party settlement estimates


The Health Care Entities Revenue Recognition Task Force and Health Care Entities Expert Panel recommend the following AICPA products for current revenue recognition issues:



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