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:
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 firstname.lastname@example.org or (860) 561-6849.
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