Knowledge Center

  • RSS Feed
  • Contact
  • Print


CCRC Accounting Guidance Update

March 12, 2018

Jonathan H. Fink, CPA

On February 1, 2018, the AICPA Financial Reporting Center issued a working draft (Issue #8-3) related to health care entities’ revenue recognition under FASB ASC 606, Revenue from Contracts with Customers. Issue #8-3 will be of particular interest to many senior living communities as it addressed revenue accounting considerations for Type A lifecare continuing care retirement community (CCRC) contracts.

The main considerations addressed in Issue #8-3 are as follows:

  • Revenue recognition of monthly fees from CCRC residents
  • Treatment of applicable lease elements within a resident contract
  • Consideration of an explicit or implied financing component within CCRC contractual arrangements
  • Revenue recognition options for nonrefundable entrance fees

The comment period on this working draft ends April 2, 2018. As such, the possibility exists that the guidance within Issue #8-3 could change in the final version. It should be noted, however, that 2018 is the required implementation date of FASB ASC 606 for calendar year-end public entities and entities with public debt. Non-calendar year end entities and entities without public debt will follow shortly thereafter. Given this timeline, it is important for all CCRCs with Type A contracts to review the guidance within Issue #8-3 and evaluate its potential impact on their financial reporting. For additional guidance or questions, please contact Jonathan Fink at or 860-561-6849.


Advisors | Auditors | Consultants | CPAs - Blum Shapiro is one of the premier public accounting firms in the northeast and a Top 100 CPA Firm in the U.S. Our professionals serve businesses, individuals and organizations in Boston (MA), Hartford (CT), Cranston (RI), Shelton (CT) ,Quincy (MA) and Newton (MA) with audit, tax and business consulting services. Our firm has developed practice areas in automotive, construction, education, government, healthcare, hospitality, manufacturing, nonprofit organizations and professional service firms. New Haven CT, Fairfield CT, Norwalk CT, Waterbury CT.