Audit and accounting guide. Construction contractors

Audit and Accounting Guide: Health Care Entities......Page 3
Preface......Page 5
Table of Contents......Page 23
 Applicability......Page 33
 Classification of Health Care Entities......Page 34
  Health Care Reform......Page 36
 An Audit of Financial Statements......Page 39
  Audit Risk......Page 40
 Terms of Engagement......Page 41
  Business Associate Agreements......Page 43
 Audit Planning......Page 44
 Group Audits......Page 45
  Complex Transactions......Page 46
 Materiality......Page 47
 Qualitative Aspects of Materiality......Page 48
 Use of Assertions in Assessment of Risks of Material Misstatement......Page 49
 Risk Assessment Procedures......Page 50
  Risk Assessment Procedures and Related Activities......Page 51
  The Entity and Its Environment......Page 53
  Analytical Procedures......Page 59
  Accounting Estimates......Page 60
  Transactions Processed by Service Organizations......Page 61
  Compliance With Laws and Regulations......Page 62
  Going-Concern Considerations......Page 64
  Written Representations......Page 69
 Independent Auditor’s Reports......Page 75
 Single Audit Act and Related Audit Considerations......Page 78
 Statutory Reporting Considerations for Health Plans......Page 80
  Deficiencies in Internal Control......Page 81
  Communicating Internal Control Matters in an Audit......Page 82
  Communications With Regulators......Page 83
 Complete Set of Financial Statements......Page 85
 Balance Sheet......Page 86
 Statement of Operations......Page 87
  Performance Indicator......Page 88
  Other Intermediate Subtotals......Page 91
  Discontinued Operations and Accounting Changes......Page 92
  Revenues......Page 93
  Expenses......Page 94
 Statement of Changes in Net Assets (or Equity)......Page 96
 Statement of Cash Flows......Page 98
 Subsequent Events......Page 100
 Example Financial Statements......Page 101
  Centralized Cash Management Arrangements......Page 103
  Cash From Restricted Donations......Page 104
  Other Restricted or Designated Cash Amounts......Page 105
 Investments......Page 106
  Investments in Debt Securities and Certain Equity Securities With a Readily Determinable Fair Value That Are Not Recorded Under the Fair Value Option......Page 108
  Investments in Certain Other Financial Instruments Without a Readily Determinable Fair Value That Are Not Recorded Under the Fair Value Option......Page 117
  Investment Pools......Page 119
  Impairment of Investments......Page 123
  Securities Lending Activities......Page 128
  Transfers of Assets to an NFP or Charitable Trust for Investment......Page 129
  Other Financial Statement Presentation Matters......Page 130
 Auditing......Page 133
Chapter 5 Derivatives......Page 139
 Introduction......Page 140
 General Guidance......Page 142
  Cash Flow Hedges......Page 143
 Hedge Accounting Requirements......Page 144
  Shortcut Method......Page 145
 Hybrid Instruments, Host Contracts, and Embedded Derivatives......Page 147
  Derivatives Embedded in Split-Interest Agreements......Page 148
  Additional Presentation and Disclosure Requirements for NFP Business-Oriented Health Care Entities......Page 149
 Auditing......Page 150
 Overview......Page 151
 Capitalized Interest......Page 152
 Lessee Involvement in Fixed Asset Construction......Page 154
 Asset Retirement and Environmental Remediation Obligations......Page 156
 Impairment or Disposal......Page 157
 Discontinued Operations......Page 158
 Nonreciprocal Transfers......Page 159
 Other Long-Lived Assets......Page 160
 Financial Statement Presentation......Page 163
 Auditing......Page 164
 Introduction......Page 169
  Conduit Bonds That Trade in Public Markets......Page 170
  Issuance of Municipal Bonds......Page 171
 Extinguishment and Modification Transactions......Page 172
  Defeasance......Page 173
  Modifications......Page 174
  Gain or Loss on Debt Extinguishment......Page 175
  Debt Issuance Costs Incurred in Connection With an Exchange or Modification of Debt Instruments......Page 176
 IRS Considerations......Page 177
  Balance Sheet......Page 179
  Disclosures......Page 184
 Obligated Group Reporting......Page 185
 Interim Financial Reporting......Page 186
  General......Page 187
  Auditor Involvement With Municipal Securities Filings......Page 189
  Letters for Underwriters and Other Requesting Parties......Page 196
  Reference to the Auditor as an "Expert"......Page 198
  Attestation Engagements Related to Municipal Securities Issuance......Page 199
 Appendix — Municipal Securities Regulation......Page 201
  The Essentials of Recognition, Measurement, and Disclosure for Contingencies......Page 205
  Medical Malpractice......Page 207
  Disclosures for Medical Malpractice......Page 214
  Physician Guarantees and Other Agreements With Physicians......Page 215
  Asset Retirement Obligations......Page 216
  Compensation and Related Benefits......Page 217
  Joint and Several Liability Arrangements......Page 220
  Agency Funds......Page 221
 Tax Considerations for NFP Health Care Entities......Page 222
  Unrelated Business Income......Page 224
  Medicaid Voluntary Contribution or Taxation Programs......Page 225
 Risks and Uncertainties......Page 226
  Auditing Medical Malpractice Loss Contingencies......Page 228
  Auditing Accounting Estimates......Page 229
  Use of Actuaries and Actuarial Methods......Page 231
  Evaluating Lawyers’ Responses......Page 232
 Auditing Considerations......Page 234
 Not-for-Profit Entities......Page 237
  Net Asset Classes......Page 238
  Reclassifications......Page 245
 Classification of Donor-Restricted Endowment Funds......Page 248
 Disclosure......Page 251
 Auditing......Page 253
Chapter 10 Health Care Service Revenue and Related Receivables......Page 257
 Overview of the Health Care Environment......Page 258
  Rate Setting With Third-Party Payors......Page 259
  The Government Payor Environment......Page 260
  Charity Care......Page 261
 Types of Health Care Revenue......Page 262
 Types of Payment Methodologies......Page 263
  Revenue Recognition......Page 264
  Accounting and Financial Reporting Requirements......Page 270
 Premium and Capitation Revenues......Page 273
 Patient Receivables......Page 274
 Estimated Final Settlements......Page 276
 Auditing......Page 279
  Accounts Receivable Confirmations......Page 280
 Appendix — Implementation Guidance for Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606)......Page 289
Chapter 11 Contributions Received and Made......Page 357
 Distinguishing Contributions From Other Transactions......Page 358
 Contributions Received......Page 360
  Expiration of Donor-Imposed Restrictions......Page 361
  Promises to Give in Future Periods (Pledges)......Page 363
  Contributions of Long-Lived Assets, the Use of Long-Lived Assets, or Resources to Acquire Them......Page 366
  Contributed Services......Page 368
  Naming Opportunities......Page 369
 Transfers of Assets to an NFP or Charitable Trust That Raises or Holds Contributions for Others......Page 371
 Contributions Made......Page 373
 Other Considerations......Page 374
 Auditing......Page 375
 Appendix — Q&A Section 6400, Health Care Entities......Page 382
 Reporting by NFP Health Care Entities......Page 399
  Relationships With Another NFP......Page 409
  Relationships With a For-Profit Entity......Page 415
  Special Entities......Page 423
 Reporting by Investor-Owned Health Care Entities......Page 425
 Presentation of Consolidated and Combined Financial Statements......Page 427
  Equity Transfers......Page 430
  Equity Transactions......Page 431
  Other Transfers......Page 432
 Disclosure......Page 433
 Mergers and Acquisitions......Page 434
  Acquisition by an NFP......Page 435
  Disclosures......Page 439
 Auditing......Page 440
 Supplement — Flowcharts......Page 443
Chapter 13 Financial Accounting and Reporting for Managed Care Services......Page 445
 Recognition and Classification of Revenue......Page 446
  Capitation Arrangements......Page 448
 Accounting for Loss Contracts......Page 449
 Acquisition Costs......Page 451
  Income and Cash Flow Statement......Page 452
 Disclosures......Page 455
Chapter 14 Financial Accounting and Reporting by Continuing Care Retirement Communities......Page 457
 Overview......Page 458
 Types of Contracts......Page 459
 Types of Living Accommodations......Page 460
 Fees and Payment Methods......Page 461
 Accounting for Refundable Advance Fees......Page 462
 Accounting for Fees Refundable to Residents Only From Reoccupancy Proceeds of a Contract Holder’s Unit......Page 465
 Accounting for Nonrefundable Advance Fees......Page 466
 Accounting for the Obligation to Provide Future Services and the Use of Facilities to Current Residents......Page 467
 Accounting for the Costs of Acquiring Initial Continuing-Care Contracts......Page 469
 Financial Statements......Page 470
 Auditing......Page 472
 Applicability of This Chapter......Page 481
 GAAP Hierarchy for Governmental Health Care Entities......Page 482
  Applicability of FASB and AICPA Pronouncements......Page 483
 Basic Financial Statements......Page 484
  Statement of Net Position......Page 485
  Statement of Revenues, Expenses, and Changes in Net Position......Page 487
  Statement of Cash Flows......Page 490
  RSI, Including MD&A......Page 491
 Measurement Attributes......Page 492
  Cash and Cash Equivalents......Page 493
  Investments and Certain Equity Interests......Page 494
 Derivatives......Page 504
  Capital Assets — General......Page 506
  Capital Asset Impairment......Page 507
  Intangible Assets......Page 508
  Excess Consideration Provided in a Governmental Acquisition (Known as Goodwill in Nongovernmental Entities)......Page 509
  Leased Assets......Page 510
  Service Concession Arrangements......Page 511
  Disclosures......Page 512
 Municipal Bond Financing and Other Long-Term Debt......Page 513
  Debt Defeasance and Extinguishment......Page 514
  Disclosures......Page 515
  Insurance-Related Contingencies......Page 517
  Asset Retirement and Pollution Remediation Obligations......Page 520
  Compensation and Related Benefits......Page 522
  Disclosures......Page 527
 Net Position......Page 528
  Financial Reporting of Net Position......Page 530
 Health Care Service Revenue and Receivables......Page 531
 Contributions and Other Nonexchange Transactions......Page 533
 The Reporting Entity and Related Entities......Page 536
  Identifying Component Units......Page 537
  Presentation of Component Units......Page 539
  Equity Interests......Page 541
  Institutionally-Related Foundations......Page 543
  Government Combinations......Page 545
 General Auditing Considerations for Governmental Health Care Entities......Page 548
  Independent Auditor’s Reports......Page 550
  Supplementary Information and Supporting Information, Including RSI......Page 551
Supplement A Statement of Position 00-1, Auditing Health Care Third-Party Revenues and Related Receivables......Page 559
Appendix A Overview of Statements on Quality Control Standards......Page 581
Appendix B References to Technical Questions and Answers......Page 591
Appendix C The New Revenue Recognition Standard: FASB ASC 606......Page 597
Appendix D Accounting for Financial Instruments......Page 607
Appendix E Information Sources......Page 617
Appendix F Category B Guidance......Page 621
Appendix G The New Leases Standard: FASB ASC 842......Page 623
Appendix H The New Not-for-Profit Financial Reporting Model Standards: FASB ASU No. 2016-14......Page 633
Appendix I Schedule of Changes Made to the Text From the Previous Edition......Page 643
Glossary......Page 651
Index of Pronouncements and Other Technical Guidance......Page 681
Subject Index......Page 703
EULA......Page 722