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cwang1026
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Joined: 16 Jun 2010
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Posts: 114

Posted: 13 Sep 2010 at 19:56 \| IP Logged

FAR 9 # 75 (for those of you who have becker 2009)

Terry, an auditor, is performing test work for a NFP hospital. Listed below are components of the statment of operations:

- Revenue relating to charity care...................................100,000
- Bad debt expense..................................................... ...70,000
- Net assets released from restrictions used for operation......50,000
- other revenue..................................................... .........80,000
- net patient serv rev (includes rev related to charity care)...500,000

what amt would be reported as unrestricted revenues, gains, and other support on the stmt of operations?

answer: $530,000

can anyone tell me why revenue relating to charity care is not included in the calculations? i thought they are considered "other operating revenue"

Aesop
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Joined: 23 Feb 2010
Location: United States
Online Status: Offline
Posts: 318

Posted: 13 Sep 2010 at 22:51 \| IP Logged

Yes, Charity care is never reported in revenues. The reason, what revenues? The expenses are however included if asked.

Maybe you are thinking the charity was money transferred from a restricted account or from some other fund. That was not mentioned. Only transfer was from restricted funds. Which apparently must have been temporarily restricted or earnings not restricted on endowments.

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