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- Date Submitted: 04/04/2011 08:39 PM
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Charitable Contributions and Debt: A Comparison of St. Jude Children’s Research Hospital/ALSAC and Universal Health Services
Hospitals are encompassed by a diverse industry in which the entities are either regulated in not-for-profit, governmental or private investor owned form. As such, the diversity amongst entities’ makes it difficult to be comparable to an industry standard. To obtain a better understanding of this diverse industry this paper will examine specifically how not-for-profit organizations report financial information in forms of charitable contributions, debt, volunteer services, disclosures of affiliated parties, differences in revenue mix in regards to not for profits vs. for profits, risk management and a comparison to government operated hospitals.
Contributions
St. Jude Children’s Research Hospital/ALSAC, a not-for-profit organization who’s mission is to “advance cures, and means of prevention, for pediatric catastrophic diseases through research and treatment. Consistent with the vision of our founder Danny Thomas, no child is denied treatment based on race, religion or a family’s ability to pay (St. Jude’s, 2009, Mission Statement).” In order for St. Jude Children’s Research hospital to maintain its goals and mission, special criteria and reporting standards are permissible for this form of not-for-profit organization specifically the process of recording contributions and deferred revenue adjustments.
According to the Financial Accounting Standards Board SFAS No 116, revenues for contributions are recognized in the period they are received and recorded at fair market value (FASB, 2010, SFAS 116). Pledges are a type of contribution that is recorded in a comparable manner to accounts receivable. However, there are distinctions between recording pledge receivables and accounts receivables. These distinctions mainly stem from the type of pledge; unconditional or conditional. Unconditional pledges are recorded when...
Hospitals are encompassed by a diverse industry in which the entities are either regulated in not-for-profit, governmental or private investor owned form. As such, the diversity amongst entities’ makes it difficult to be comparable to an industry standard. To obtain a better understanding of this diverse industry this paper will examine specifically how not-for-profit organizations report financial information in forms of charitable contributions, debt, volunteer services, disclosures of affiliated parties, differences in revenue mix in regards to not for profits vs. for profits, risk management and a comparison to government operated hospitals.
Contributions
St. Jude Children’s Research Hospital/ALSAC, a not-for-profit organization who’s mission is to “advance cures, and means of prevention, for pediatric catastrophic diseases through research and treatment. Consistent with the vision of our founder Danny Thomas, no child is denied treatment based on race, religion or a family’s ability to pay (St. Jude’s, 2009, Mission Statement).” In order for St. Jude Children’s Research hospital to maintain its goals and mission, special criteria and reporting standards are permissible for this form of not-for-profit organization specifically the process of recording contributions and deferred revenue adjustments.
According to the Financial Accounting Standards Board SFAS No 116, revenues for contributions are recognized in the period they are received and recorded at fair market value (FASB, 2010, SFAS 116). Pledges are a type of contribution that is recorded in a comparable manner to accounts receivable. However, there are distinctions between recording pledge receivables and accounts receivables. These distinctions mainly stem from the type of pledge; unconditional or conditional. Unconditional pledges are recorded when...