Voluntary Health

1
Voluntary Health Welfare Organizations (VHWOs)

• Examples

• Most organizations are Non-Govt, but may receive
  some government support.

2
Accounting Authority
GASB
FASB
Government Supported
Non-Government Supported (Most)
3
FAS 116 Impact

• Major since contributions are major sources of
  revenue.

FAS 117 Impact

• Major since most VHWOs prepared financial
  statements on a disaggregated (layered) basis.

4
Sources of Accounting Authority

• AICPA Audit Guide
• Audits of VHWOs (1974)
• Audit Accounting Guide
• NPOs (1996)
• SFAS 116
• SFAS 117
• SFAS 124, 133, and 135

5
Financial Statements

• Statement of Financial Position (Net
  Assets as to Restriction Category)
• Statement of Activities
• Statement of Cash Flows
• Statement of Functional Expenses

6
VHWO Accounting Notes of Importance

• Revenues
• Full Accrual Basis
• Gross Amounts
• Conditional Unconditional
• Categories of Restrictions
• PV for Multiyear Contributions

7
VHWO Accounting Notes of Importance

• Expenses
• Full Accrual Basis
• Reported Only in Unrestricted Net Asset Class
• Involves Reclassification of Use of Temporarily
  Restricted Assets
• Reported by Function Natural Classification

8
Healthcare Accounting

• Types of Organizations
• Nongovernmental NFP
• Governmental
• Commercial (For-Profit)
• Financial Accounting Standards
• Category A FASB GASB Hierarchy
• Category B AICPA Healthcare Guide (1997)

9
Healthcare Accounting

• Governmental, Nongovernmental NPOs, and
  Commercial Healthcare entities are similar.
• Business type activities (substantial of
  revenue is for services provided)
• AICPA instrumental in developing standards for
  all types
• Therefore FASB GASB have accepted AICPA Audit
  Guide as category B GAAP
• FASB and GASB requirements are supplemented by
  AICPA Guide

10
Financial Statements-NG

• Statement of Operations
• Statement of Changes in Net Assets
• Statement of Financial Position
• Statement of Cash Flows

11
Governmental Hospitals

• Required to follow GASB 34 (Category A) and
  AICPA Health Care Guide (Category B) GAAP
• Reporting as
• Special Purpose Government (Chapter 9)
• S of R, E, Changes in NA may be two statements
  as illustrated in Chapter 12
• Enterprise Fund (Illustrations 6-1, 6-2, 6-3)