There are several large accounting and reporting changes on the horizon and it will be important for CHC finance departments to be ready. In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases (Topic 842), the long-awaited new standard on lease accounting. Lessees will now recognize assets and liabilities on their balance sheet for all leases with terms of more than 12 months. In August 2016, the FASB released ASU 2016-14, an NFP accounting standard for financial reporting. This marks the largest change to NFP financial reporting in 20 years. And ASU 2014-09, Revenue from Contracts with Customers (Topic 606) was released which impacts revenue recognition. This was followed up by guidance issued from the AICPA specific to health care organizations.
It will be beneficial to have a good understanding of these three significant changes as they all are implemented over the next two to three years.
Understand the new NFP financial reporting standard issued by the FASB.
Understand the new lease accounting standard as issued by the FASB.
Understand the new revenue recognition standard as issued by the FASB and the related guidance issued by the AICPA.