Healthcare entities are receiving COVID-19 government assistance from a number of different sources. KPMG addresses the accounting for this aid.
All non-governmental healthcare entities
CARES Act was signed into law on March 27, 2020
$30 billion of provider relief funding was disbursed in two installments on April 10 and April 17, 2020
HHS announced plans to disburse additional provider relief funding on April 22, 2020
Payments made to a healthcare entity for services provided to its Medicare patients represent transaction price for the services provided and are accounted for under ASC 606.
For payments made from the $50 billion of general allocations of provider relief funding:
Not-for-profit healthcare entities will account for funds received as a conditional contribution under ASC 958-605.
For-profit healthcare entities will consider their previous accounting policies and analogous accounting guidance to account for funds received.
The funds received from the CARES Act provider relief funding is considered a Type II nonrecognized subsequent event for reporting periods before its disbursement; this is because the Act required subsequent action by the HHS Secretary.