AICPA Addresses Health Care Revenue Recognition Issues
Health care entities face unique challenges in applying the new revenue recognition standard, Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), due to the variety of revenue streams common in the industry. The American Institute of CPAs (AICPA) plans to develop a revenue recognition guide to provide nonauthoritative guidance, including hints and examples, to aid entities with implementation of the new standard; the final guide is expected to be issued in 2017.
On July 1, 2016, AICPA released working drafts on two significant revenue implementation issues affecting health care entities related to (1) self-pay balances and (2) application of the portfolio approach. Feedback is requested by September 1, 2016. This paper summarizes the drafts’ key points, but you’re encouraged to review the full documents and provide feedback to the AICPA.