Health Care Entities Expert Panel

FAQ Available

With assistance from a group of health care experts formed by the AICPA, an FAQ has been developed to assist financial statement preparers and audit practitioners as they work through some of the challenges they are encountering amid the pandemic.

The FAQ provides information on the following topics:

• Downturn in the Economy and Job Market Related to COVID-19 and Its Impact on Accounts Receivable and Estimate of the Transaction Price.
• Carrying Value of COVID-19 Supply Inventories.
• PPP loans, including issues related to loan forgiveness.
• Taxability of forgiveness income and expenses.
• The services CPAs are able to provide to clients related to PPP forgiveness.
• Federal Emergency Management Agency funding.
• The 2020 payroll tax deferral under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136.
• The employee retention credit.

The Healthcare Financial Management Association, through its Principles and Practices Board, published two nonauthoritative issue analyses in October 2019 related to revenue recognition under the FASB’s Topic 606. One addresses revenue recognition implications for capitation and risk sharing arrangements; the other covers provider tax programs and similar arrangements. A third nonauthoritative issue analysis related to Topic 606, on implicit price concession and bad debt considerations, was published in January 2019.

Read an article, “Opinion: FASB proposal jeopardizes health care entity financing,” about Proposed ASU (Revised), Debt (Topic 470): Simplifying the Classification of Debt in a Classified Balance Sheet (Current versus Noncurrent), which could make variable-rate debt obligations obsolete. If adopted, the proposal may cause financial statement users to be misinformed about health care entities’ financial position.

ASB Issues SAS No. 141 to Delay SAS Nos. 134 – 140 Effective Dates, Permit Early Implementation

The ASB has issued SAS No. 141, Amendment to the Effective Dates of SAS Nos. 134–140, to 1) delay by one year the effective dates of SAS Nos. 134–140 (which, among other things, substantially changes the auditor’s report) from December 15, 2020, to December 15, 2021, and 2) and also permits early implementation of this suite of standards. SAS No. 141 becomes effective upon issuance.

Visit our hub site, Recently Issued Auditing and Attestation Standards: Information and Resources, for the latest information on SAS Nos. 134 – 141.

ASB Issues SAS No. 133 on Exempt Offering Documents

The Auditing Standards Board issued SAS No. 133, Auditor Involvement with Exempt Offering Documents (AICPA, Professional Standards, AU-C sec. 945), to address the auditor’s responsibilities with respect to all exempt offerings of securities undertaken pursuant to federal and state securities laws, and similar laws governing franchise offerings. AU-C section 925, Filings With the U.S. Securities and Exchange Commission Under the Securities Act of 1933 (AICPA, Professional Standards), addresses other offerings. Prior to the issuance of SAS No. 133, the AICPA provided best practices specific to issuances of municipal securities in industry-specific auditing guidance appearing in the AICPA Audit and Accounting Guides, State and Local Governments and Health Care Entities. SAS No. 133 amends AU-C section 560, Subsequent Events and Subsequently Discovered Facts (AICPA, Professional Standards), and AU-C section 925, and becomes effective for exempt offering documents with which the auditor is involved that are initially distributed, circulated, or submitted on or after June 15, 2018.