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Course 1770
IFRS and US GAAP for the Health Care Sector (2-day course)

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Contents


Introduction

Health care organisations face unique financial reporting challenges due to complex revenue arrangements, third-party payor considerations, health care contracting, charity care, medical malpractice, and other issues specific to the health care industry. This two-day course examines international financial reporting issues in detail and their effect on health care entities. The programme dissects the critical issues that go beyond mere number-crunching and extends into the way that the health care industry conducts and shapes its accounting and reporting practices.

The course includes coverage of the following types of health care organisations; not-for-profit hospitals, nursing homes, home health agencies, health maintenance organisations, and ambulatory care organisations. Although participants from governmental organisations will find the course useful, programme content does not specifically cover entities such as government-run hospitals that must comply with specific government-mandated financial reporting practices.

Through the use of examples, case studies, and real-world financial statements, course participants become familiar with the requirements and international best practices of health care accounting. IFRS of particular relevance to the sector are discussed. Specific guidance is primarily found in US GAAP from a variety of sources, including: Statement of Position (SOP) 98-2 Accounting for Costs of Activities of Not-for-Profit Organizations and State and Local Governmental Entities That Include Fund Raising; Statement of Position 02-2 Accounting for Derivative Instruments and Hedging Activities by Not-for-Profit Health Care Organizations, and Clarification of the Performance Indicator; the AICPA Audit and Accounting Guide (AAG) for health care organisations; and various other Standards and Emerging Issues Task Force (EITF) consensus positions.

By reference to accepted accounting practices in the industry, participants leave this course with practical knowledge of the accounting standards that are applicable to the health care industry. Programme attendees, for example, learn how to apply revenue recognition requirements to various health care revenue arrangements, how to classify, recognise and measure investments, and how to determine the appropriate accounting for medical malpractice situations, in addition to gaining an understanding of the disclosure requirements and other issues that are unique to health care organisations.

This course expands participants' current knowledge of health-care industry accounting and also provides information on the most recent pronouncements affecting the sector and anticipated upcoming changes, as well as developing an awareness of issues that may arise during the convergence of IFRS and US GAAP requirements.

The programme answers questions such as:

  • What accounting requirements apply to health care revenues, receivables, charity care, prepaid services, and refundable fees?
  • When and how are malpractice liabilities recognised on the financial statements?
  • How are transfers between related organisations disclosed and reported?
  • What financial statement presentation and disclosure requirements are particularly significant to health care entities?
  • What are the pending issues and recent accounting pronouncements of interest to the health care sector?

Prerequisites

Intermediate understanding of accounting principles based on any national standards.
No advance preparation is required for this course.

Course Level

Overview

Topics

  • Financial Reporting Considerations of Health Care Organisations
  • Classification
  • Measurement focus
  • Classification and reporting of net assets
  • Statement of Net Assets or Balance Sheet
  • Statement of Revenues, Expenses, and Changes in Net Assets/Equity
  • Statement of Cash Flows
  • Revenue from health care services
  • Third-party payor considerations
  • Health care contracting
  • Cash and Cash Equivalents
  • Accounting and financial reporting
  • Agency funds
  • Disclosures
  • Investments
  • Classification, recognition and measurement
  • Transfers of investment assets to a not-for-profit organisation or charitable trust
  • Financial statement presentation
  • Receivables
  • Rate setting
  • Estimated final settlements
  • Waiver contingencies under governmental programmes
  • Premiums and stop-loss insurance receivables
  • Future-period promises (pledges)
  • Interfund receivables
  • Financial statement presentation
  • Property, Plant and Equipment
  • Overview
  • Recognition and measurement, including capitalisation & depreciation issues
  • Derecognition
  • Impairment
  • Financial statement presentation
  • Supplies and Other Assets
  • Overview
  • Recognition and measurement
  • Financial statement presentation
  • Current and Long-term Liabilities
  • Overview
  • Accounting for current liabilities
  • Private inurement
  • Long-term debt
  • Financing authorities
  • Assets whose use is limited
  • Advance refundings
  • Arbitrage rebate liabilities
  • Financial statement presentation
  • Income Taxes
  • Overview
  • Tax considerations for not-for-profit organisations
  • Tax-exempt entities
  • Unrelated business income tax
  • Financial statement presentation
  • Commitments and Contingencies
  • Overview
  • Medical malpractice claims and accruing malpractice liabilities
  • Accounting for medical malpractice claims insured by captive insurance companies
  • Accounting for claims-made insurance policies and tail coverage
  • Accounting for retrospectively rated premiums
  • Accounting for trust funds
  • Presentation and disclosure
  • Net Assets (Equity)
  • Investor-owned health care organisations
  • Not-for-profit health care organisations
  • Revenue, Expenses, Gains and Losses
  • Conceptual framework for revenue, expenses, gains, and losses
  • Distinguishing charity care from bad debt expense or allowance
  • Revenue
  • Expenses
  • Financial statement presentation
  • The Reporting Entity and Related Organisations
  • Overview
  • Financial reporting of nongovernmental health care entities
  • Transfers (equity transfers, equity transactions, other transfers)
  • Related fund-raising organisations
  • Disclosure
  • Prepaid Health Care Services
  • Overview
  • Accounting for health care costs
  • Accounting for loss contracts
  • Accounting for stop-loss insurance
  • Accounting for contract acquisition costs
  • Recent and Upcoming Issues
  • Recently issued standards, interpretations and their impact on health care organisations
  • Exposure Drafts that will affect the health care industry
  • IFRS-US GAAP convergence update
  • IASB-FASB projects and plans of interest to health care entities

Course Benefits

  • Learn practical answers to typical health care-related questions on revenue recognition, receivables, charity care, prepaid services and refundable fees
  • Be able to accurately account for malpractice liability situations
  • Comprehend the financial reporting requirements for transfers between related organisations
  • Know how to apply appropriate recognition methods to a variety of revenue sourcing transactions
  • Understand how to classify, recognise and measure investments
  • Comply with financial statement presentation and disclosure requirements
  • Become familiar with significant recent and upcoming changes affecting the health care sector

Teaching Method

  • Live group instruction, with interactive participation encouraged
  • Identification of the critical issues affecting financial reporting in the health care sector
  • Succinct examples and cases that demonstrate classification and accounting for revenue, malpractice, charity care, prepaid services, receivables and other health care-related transactions
  • Review of real-world financial statements to illustrate the application of accounting requirements
  • Presentation and discussion of recommended financial statement disclosures
  • All participants receive a comprehensive binder containing copies of the presentation slides, handouts and other course materials

Continuing Professional Education (CPE)

16 hours

Venue

All of our Dubai seminars take place in 4 star professional conference facilities, usually in city-centre downtown hotels like the Marriott, Sheraton or Hilton brands.

Detailed Joining Instructions are sent to all registered delegates by email approximately one month before the event. The Joining Instructions will confirm exact venue details and nearby (or onsite) hotel recommendations with bedroom rates where available.

Coffee and lunch will be provided.

Course Summary

This two-day course examines international financial reporting issues in detail and their effect on the health care industry. The programme includes case studies and financial statements that illustrate the real-world application of financial reporting requirements. Topics include: Financial reporting considerations of health care organisations (classification, measurement focus, financial statements, revenue from health care services, third-party payor considerations, health care contracting) | Cash and cash equivalents (accounting and financial reporting, agency funds, disclosures) | Investments (classification, recognition and measurement, transfers of investment assets to a not-for-profit organisation or charitable trust, financial statement presentation) | Receivables (rate setting, estimated final settlements, waiver contingencies under governmental programmes, premiums and stop-loss insurance receivables, future-period promises/pledges, interfund receivables, financial statement presentation) | Property, plant and equipment (recognition and measurement including capitalisation and depreciation issues, derecognition, impairment, financial statement presentation) | Supplies and other assets (recognition and measurement, financial statement presentation) | Current and long-term liabilities (accounting for current liabilities, private inurement, long-term debt, financing authorities, assets whose use is limited, advance refundings, arbitrage rebate liabilities, financial statement presentation) | Income taxes (tax considerations for not-for-profit organisations, tax-exempt entities, unrelated business income tax, financial statement presentation) | Commitments and contingencies (medical malpractice claims and accruing malpractice liabilities, accounting for medical malpractice claims insured by captive insurance companies, accounting for claims-made insurance policies and tail coverage, accounting for retrospectively rated premiums, accounting for trust funds, presentation and disclosure) | Net assets/equity (investor-owned health care organisations, not-for-profit health care organisations) | Revenue, expenses, gains and losses (conceptual framework for revenue/expenses/gains/losses, distinguishing charity care from bad debt expense or allowance, revenue, expenses, financial statement presentation) | The reporting entity and related organisations (financial reporting of nongovernmental health care entities, equity transfers and equity transactions, other transfers, related fund-raising organisations, disclosure) | Prepaid health care services (accounting for health care costs, accounting for loss contracts, accounting for stop-loss insurance, accounting for contract acquisition costs) | Recent and upcoming issues (recently issued standards, interpretations and their impact on the health care industry) | Exposure Drafts that will affect health care entities | IFRS-US GAAP convergence update | IASB-FASB projects and plans of interest to health care organisations.