Hot Topic | April 2020
Healthcare entities’ accounting for COVID-19 government aid
Healthcare entities are receiving COVID-19 government assistance from a number of different sources. KPMG addresses the accounting for this aid.
Applicability
- All non-governmental healthcare entities
Relevant dates
- 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
- Effective immediately
Key impacts
- 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.
Report contents
- Medicare payments
- Government assistance for COVID-19 response
- Subsequent events
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