3FAS #116 Impact FAS #117 Impact Major – since contributions are major sources of revenue.FAS #117 ImpactMajor – since most VHWO’s prepared financial statements on a disaggregated (layered) basis.
4Sources of Accounting Authority: AICPA Audit GuideAudits of VHWO’s (1974)Audit & Accounting GuideNPO’s (1996)SFAS #116SFAS #117SFAS #124, 133, and 135
5Financial StatementsStatement of Financial Position (Net Assets as to Restriction Category)Statement of ActivitiesStatement of Cash FlowsStatement of Functional Expenses
6VHWO Accounting Notes of Importance… RevenuesFull Accrual BasisGross AmountsConditional & UnconditionalCategories of RestrictionsPV for Multiyear Contributions
7VHWO Accounting Notes of Importance… ExpensesFull Accrual BasisReported Only in Unrestricted Net Asset ClassInvolves Reclassification of Use of Temporarily Restricted AssetsReported by Function & Natural Classification
9Healthcare Accounting Governmental, Nongovernmental NPO’s, and Commercial Healthcare entities are similar.Business type activities (substantial % of revenue is for services provided)AICPA instrumental in developing standards for all typesTherefore FASB & GASB have accepted AICPA Audit Guide as category B GAAPFASB and GASB requirements are supplemented by AICPA Guide
10Financial Statements-NG Statement of OperationsStatement of Changes in Net AssetsStatement of Financial PositionStatement of Cash Flows
11Governmental Hospitals Required to follow GASB #34 (Category A) and AICPA Health Care Guide (Category B) GAAPReporting as—Special Purpose Government (Chapter 9)S of R, E, & Changes in NA may be two statements as illustrated in Chapter 12Enterprise Fund (Illustrations 6-1, 6-2, 6-3)