for revenue recognition for patient revenue and bad debts for financial
statements prior to December 31, 2011 and the provisions effective for
financial statements filed after December 31, 2011.
In July 2011, the FASB issued Accounting Standard Update 2011-07 – Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities (ASU 2011-07). Although it will not impact operating results, ASU 2011-07 will change the way that many healthcare entities present the provision for bad debts in their financial statements. Healthcare entities affected by this update include certain continuing care retirement communities, clinics, hospitals, home health agencies, nursing homes and rehabilitation facilities. These organizations will have to review their revenue recognition and reserving practices in order to determine whether these changes will apply to them, as discussed further in this article.