ABSTRACT
While fund-raising and beneficiary organizations may remain legally separate, two recently developed accounting principles will make it almost impossible to maintain a separation between contributed and operating receipts and will blur the distinctions that have been achieved by legal separation.
Subject(s)
Accounting/legislation & jurisprudence , Fund Raising/legislation & jurisprudence , Organizations, Nonprofit/economics , United StatesABSTRACT
Two newly proposed American Institute of Certified Public Accountants audit guides--one for healthcare organizations and one for not-for-profit organizations--will require changes in accounting and financial reporting. The proposed guides cover topics such as flexibility in format and terms, functional and natural classification of expenses, differentiating revenue from gains, and rules relating to long-lived assets.
Subject(s)
Accounting/standards , Financial Audit/standards , Hospitals, Voluntary/economics , Organizations, Nonprofit/economics , Fund Raising , Guidelines as Topic , Income , Investments , United StatesABSTRACT
The Financial Accounting Standards Board (FASB) is considering a change in rules concerning the circumstances when an organization must present consolidated financial reports with its related organizations. This change could affect healthcare providers that have related foundations or have profit-making affiliates such as a property management company, laundry company, or collection bureau.
Subject(s)
Accounting/standards , Financial Audit/standards , Financial Management, Hospital/standards , Hospitals, Proprietary/economics , Hospitals, Voluntary/economics , Societies , United StatesABSTRACT
The process and responsibility for a healthcare organization's investment decisions should be clearly documented in an investment policy. Any investment policy should contain at least seven elements: how investments relate to the organization's mission; responsibilities of involved parties; long- and short-term objectives; desired balance between return and risk; proportions of a portfolio held in stocks, bonds, and other investments; disposition of donated assets; desired investment reports; and the process for keeping the policy current.
Subject(s)
Documentation/standards , Financial Management, Hospital/standards , Investments/standards , Organizational Policy , Policy Making , United StatesABSTRACT
Informed price setting in private psychiatric hospitals is based on many factors, including accounting cost, economic cost, mission, long-term plans, and competition. Because no single cost accounting method yields the "right" price without the input of judgment and the consideration of other factors, several appropriate and useful methods of cost accounting should be considered. And because various approaches to price setting carry varying degrees of risk, informed price setting must evaluate them all.
Subject(s)
Fees and Charges , Financial Management, Hospital/methods , Hospitals, Psychiatric/economics , Rate Setting and Review/methods , Accounting/methods , Cost Allocation/methods , Costs and Cost Analysis , Hospitals, Private/economics , Planning Techniques , United StatesABSTRACT
Guidelines contained in the American Institute of Certified Public Accountant's (AICPA's) new healthcare audit guide require some hospitals to revise systems for compiling financial statements on accounts receivable and revenue. An accounting method can be devised to identify financial responsibility as soon as possible after discharge, record amounts to be written off, and, through an analysis of closed accounts, estimate the collection process on accounts for which insufficient information is available.
Subject(s)
Accounts Payable and Receivable , Financial Audit/standards , Financial Management, Hospital/standards , Academies and Institutes , United StatesABSTRACT
Many healthcare organizations must change the way they report patient service revenue, following provisions in the American Institute of Certified Public Accountants' recently revised healthcare audit guide. The guide directs that bad debts should be reported as expenses and that charity care should be excluded from revenue and accounts receivable. As a result, hospital executives must ensure that criteria for differentiating charity care from bad debts are in place, understood, and properly carried out.
Subject(s)
Accounting/standards , Financial Audit/standards , Financial Management, Hospital/standards , Financial Management/standards , Medical Indigency/economics , Charities/economics , Decision Making , Income , United StatesSubject(s)
Capital Expenditures/legislation & jurisprudence , Economics/legislation & jurisprudence , Financial Management, Hospital/legislation & jurisprudence , Financial Management/legislation & jurisprudence , Medicare/organization & administration , Prospective Payment System/organization & administration , Centers for Medicare and Medicaid Services, U.S. , United StatesABSTRACT
Misconceptions concerning the distinction between accounting principles, reporting rules, and payment practices and how they interrelate can lessen the effectiveness of hospital financial managers in these areas/clarification and recommendations are offered.