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).

    Issue # Description of Implementation Issue Status
    1 Consideration of the following regarding self-pay balances:
    1a-b
    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 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 AICPA RRWG
    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 patients
    This implementation issue will discuss how to apply the portfolio approach to revenue from self-pay patients and third party payors.
    Submitted to AICPA RRWG
    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
    8 Determination (estimation) of transaction price (expected value vs. most likely) as it relates to third party estimates


    FEEDBACK REQUESTED

    Draft Revenue Recognition Implementation Issues included for informal comment, when available, will be listed below.

    Respondents should submit any comments including the implementation issue number to revreccomments@aicpa.org by the dates noted below:

    Issue # Comment Due Date


    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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