Essentials of Accounting for Governmental and Not-for-Profit Organizations 10th Edition_12 pot

Apago PDF Enhancer College and University Accounting—Private Institutions 353 endowment (permanently restricted). The trust assets are recorded at fair market value, the present value of the amounts to be paid to the beneficiary are recorded as a liability, and the difference is recorded as contribution revenue in the appro- priate net asset class. Adjustments in the present value of the liability are recorded each year as a change in the value of split-interest agreements in the Statement of Activities. A charitable gift annuity is the same as a charitable remainder trust except that no formal trust agreement exists; normally a contract is signed. The accounting is the same as for a charitable remainder trust. A pooled (life) income fund represents a situation in which the assets of sev- eral life income agreements are pooled together. A life income fund represents a situation in which all of the income is paid to a donor or a beneficiary during his or her lifetime. At the end of the donor’s or beneficiary’s life, the assets go to the not-for-profit organization for unrestricted or restricted purposes. In a pooled (life) income fund, the assets are recorded and entered into the pool based on the fair value of all assets at the time of entry. A revenue is recognized in the temporarily restricted net asset class, discounted for the time period of the donor’s or benefi- ciary’s expected remaining life. The difference between the fair value of the assets received and the revenue is recorded as deferred revenue, representing the amount of the discount for future interest. Illustrative journal entries are presented in the Not-for-Profit Guide, and in the NACUBO Financial Accounting and Reporting Manual. SUMMARY—PRIVATE COLLEGE AND UNIVERSITY REPORTING Private colleges and universities are required to follow the accounting principles promulgated by the FASB and in the AICPA Not-for-Profit Guide. These pro- nouncements include FASB statements on display, contributions, depreciation, and investments. The Not-for-Profit Guide, unlike the Health Care Guide (described in Chapter 12), does not prescribe or illustrate reporting format. However, the NACUBO Financial Accounting and Reporting Manual for Higher Education pro- vides more detailed guidance and illustrative entries for both private and public institutions. Governmental colleges and universities are under the jurisdiction of the GASB, for purposes of financial reporting. GASB Statement 35 requires governmental col- leges and universities to follow GASB Statement 34 guidance for special-purpose entities. Most choose to report as special-purpose entities engaged in business-type activities only. That accounting is described and illustrated in Chapter 9. Now that you have finished reading Chapter 11, complete the multiple choice questions provided on the text’s Web site (www.mhhe.com/copley10e) to test your comprehension of the chapter. cop2705X_Ch11_335-361.indd 353cop2705X_Ch11_335-361.indd 353 2/1/10 6:19:28 PM2/1/10 6:19:28 PM Apago PDF Enhancer 354 Chapter 11 Questions and Exercises 11–1. Obtain a copy of the annual report of a private college or university. Answer the following questions from the report. For examples, try: Baylor University: http://www.baylor.edu/content/services/document.php/53248.PDF Harvard University: http://vpf-web.harvard.edu/annualfinancial/ University of Notre Dame: http://cfweb-prod.nd.edu/controller/annual-report/ Stanford University: http://bondholder-information.stanford.edu/home.html Vanderbilt University: http://financialreport.vanderbilt.edu/ a. Is the annual report audited? Name the auditing firm. b. Does the organization present (1) a single Statement of Activities, or does it present (2) a Statement of Unrestricted Revenues, Expenses, and Other Changes in Unrestricted Net Assets together with a Statement of Changes in Net Assets? c. What additional financial statements are presented? d. Does the organization have temporarily restricted net assets? What is the amount of the net assets released from restrictions in the current period? e. Does the organization have permanently restricted net assets? f. Is there a note describing split interest agreements? 11–2. For each of the following, identify (1) which accounting standards–setting body has primary authority, (2) the required financial statements, and (3) the account titles used in the equity section of the balance sheet or equivalent statement. a. Public (government-owned) colleges and universities. b. Private, not-for-profit colleges and universities. c. Investor-owned, proprietary schools. 11–3. With regard to private-sector colleges and universities: a. List the three net asset classes required under FASB Statement 117. b. List the financial reports required under FASB Statement 117. c. Distinguish between an endowment, a term endowment, and a quasi- endowment. Indicate the accounting required for each. d. Outline the accounting required by the FASB for ( 1 ) An endowment gift received in cash. (2) A pledge received in 2011, unrestricted as to purpose but restricted for use in 2012. (3) A pledge received in 2011, restricted as to purpose other than plant. The purpose was fulfilled in 2012. e. Discuss the requirements necessary before contributed services are recorded as revenues. cop2705X_Ch11_335-361.indd 354cop2705X_Ch11_335-361.indd 354 2/1/10 6:19:28 PM2/1/10 6:19:28 PM Apago PDF Enhancer College and University Accounting—Private Institutions 355 11–4. Define and outline the accounting required for each of the following types of agreements: a. Charitable lead trusts. b. Charitable remainder trusts. c. Perpetual trust held by a third party. 11–5. During the year ended June 30, 2012, the following transactions were re- corded by St. Ann’s College, a private institution: 1. Tuition and fees amounted to $6,800,000, of which $4,500,000 was re- ceived in cash. A state appropriation was received in cash in the amount of $600,000. Sales and services of auxiliary enterprises amounted to $3,500,000, all of which was received in cash. 2. Student scholarships were awarded in the amount of $900,000. Recipi- ent students were not required to provide services for this financial aid. 3. The provision for doubtful accounts for the year ended June 30, 2012, amounted to $25,000. During the year, doubtful accounts related to stu- dent fees were written off in the amount of $20,000. 4. During the year, contributions received, all in cash, amounted to: unre- stricted, $600,000; temporarily restricted for use in the year ended June 30, 2013, $1,100,000 (unrestricted as to purpose); temporarily restricted for certain purposes, $900,000; and restricted for endowments, $1,000,000. 5. During the year, $500,000 was released from restrictions based on time, and $700,000 was released from restrictions for program purposes (re- search). The applicable research expense of $700,000 was paid in cash. 6. Investment income amounted to: unrestricted income from endowments, $150,000; income from endowments for purposes restricted by program, $200,000; and income from endowments required to be added to the endowment, $15,000. 7. During the year, St. Ann’s received a gift of $1,500,000, which was to be used for the future construction of an addition to the library. 8. During the year, $1,300,000 was released from restriction for the con- struction of a new wing to the student services building. The building was constructed using the cash. St. Ann’s records all fixed assets in the unrestricted net asset class. 9. Endowment long-term investments, carried at a basis of $2,000,000, were sold for $2,150,000. The total proceeds were reinvested. Income is to remain as permanently restricted. 10. Expenses for the year (in addition to expenses provided for in other parts of the problem) were instruction, $5,050,000; research, $1,300,000; public service, $300,000; academic support, $200,000; student services, $600,000; institutional support, $700,000; and auxiliary enterprises, $3,400,000. Of this, $10,950,000 was paid in cash and $600,000 was credited to Accounts Payable. cop2705X_Ch11_335-361.indd 355cop2705X_Ch11_335-361.indd 355 2/1/10 6:19:29 PM2/1/10 6:19:29 PM Apago PDF Enhancer 356 Chapter 11 11. Depreciation recorded for the year amounted to $540,000. One-third of that amount was charged to instruction, one-third to institutional sup- port, and one-third to auxiliary enterprises. 12. The institution sustained an uninsured fire loss of $230,000. Repairs were paid in cash and charged to the fire loss account. 13. Closing entries were prepared. a. Record the transactions on the books of St. Ann’s College. Indicate the net asset class for revenues and reclassifications. b. Prepare, in good form, a Statement of Unrestricted Revenues, Expenses, and Other Changes in Unrestricted Net Assets for St. Ann’s College for the year ended June 30, 2012. c. Prepare, in good form, a Statement of Changes in Net Assets for St. Ann’s College for the year ended June 30, 2012. The net assets at the beginning of the year amounted to $2,080,000. 11–6. Record the following transactions on the books of Calvin College, which follows FASB standards, for Calvin’s fiscal year, which ends on June 30, 2012. 1. During the year ended June 30, 2012, a donor made a cash contribution in the amount of $1,000,000 with the stipulation that the principal be in- vested permanently and that the income be used for research in biology. The cash was invested. 2. Also during the year ended June 30, 2012, a donor made an unrestricted cash contribution of $500,000. Calvin’s governing board decided to estab- lish this gift as a permanent investment and invested the funds. 3. By the end of the year, the investments mentioned in transaction 1 earned $45,000 and the investments mentioned in transaction 2 earned $22,500; both amounts were received in cash. 4. The fair value of investments in transaction 1 increased by $15,000 at year-end. 5. During the year ended June 30, 2013, the biology research was completed, using the income mentioned in transaction 3. 11–7. Record the following transactions on the books of Carnegie College, a private institution that follows FASB standards. The year is 2012. 1. During 2012, Carnegie received a pledge in the amount of $225,000, unrestricted as to purpose, indicating that the amount was to be paid to and used by the college in 2013. 2. Carnegie received $80,000 in cash from a donor who specified that the funds were to be used for research in voting behavior. The university did not conduct the research in 2012. 3. Carnegie conducted certain research on electrical conductivity during 2012, costing $50,000. A grant had been given in 2010 for just that purpose, but Carnegie hoped to use $30,000 of unrestricted resources for cop2705X_Ch11_335-361.indd 356cop2705X_Ch11_335-361.indd 356 2/1/10 6:19:29 PM2/1/10 6:19:29 PM Apago PDF Enhancer College and University Accounting—Private Institutions 357 the 2012 research and keep $30,000 of the original grant for future use in research. (Hint: Follow the required procedure in this case.) 4. During 2012, Carnegie reclassified $65,000 of funds that had been given in 2011 to support unspecified activities in 2012. 5. During 2011, Carnegie received $750,000 to renovate a dormitory. During 2012, $620,000 of the funds were spent. Carnegie records all plant in the unrestricted net asset class. 11–8. Presented below are the closing entries for Lee College, a private not-for- profit, for the year ended December 31, 2012. Debits Credits Revenues—Unrestricted—Tuition and Fees . . . . . . . . . . . . . . . Revenues—Unrestricted—Unrestricted Income on Endowment Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . Revenues—Unrestricted—Sales and Services of Auxiliary Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Revenues—Unrestricted—Contributions . . . . . . . . . . . . . . . . . Reclassifications to Unrestricted Net Assets— Satisfaction of Program Restrictions . . . . . . . . . . . . . . . . . . . Reclassifications to Unrestricted Net Assets— Satisfaction of Plant Acquisition Restrictions . . . . . . . . . . . . Tuition Discount—Unrestricted—Student Aid . . . . . . . . . . Instruction Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Research Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Public Service Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . Institutional Support Expense . . . . . . . . . . . . . . . . . . . . . . Student Services Expense . . . . . . . . . . . . . . . . . . . . . . . . . Auxiliary Enterprise Expense . . . . . . . . . . . . . . . . . . . . . . . Net Assets—Unrestricted—Undesignated . . . . . . . . . . . . Revenues—Temporarily Restricted—Contributions . . . . . . . . . Revenues—Temporarily Restricted—Grants . . . . . . . . . . . . . . . Reclassifications From Temporarily Restricted Net Assets—Satisfaction of Program Restrictions . . . . . Reclassifications from Temporarily Restricted Net Assets—Satisfaction of Plant Acquisition Restrictions . . . Net Assets—Temporarily Restricted Revenues—Permanently Restricted—Contributions . . . . . . . . . Gains on Long-Term Investments . . . . . . . . . . . . . . . . . . . . . . . Net Assets—Permanently Restricted . . . . . . . . . . . . . . . . . $11,200,000 40,000 5,000,000 100,000 640,000 1,160,000 1,500,000 950,000 2,540,000 750,000 $ 110,000 7,000,000 4,500,000 1,200,000 700,000 150,000 3,500,000 980,000 640,000 1,160,000 650,000 3,290,000 Assume the January 1, 2012, net asset balances are as follows: $1,000,000 unrestricted net assets; $300,000 temporarily restricted net assets; and $1,700,000 permanently restricted net assets. a. Prepare a Statement of Activities using the format presented in Illustration 10–1. cop2705X_Ch11_335-361.indd 357cop2705X_Ch11_335-361.indd 357 2/1/10 6:19:29 PM2/1/10 6:19:29 PM Apago PDF Enhancer 358 Chapter 11 b. Prepare a Statement of Unrestricted Revenues, Expenses, and Other Changes in Unrestricted Net Assets together with a Statement of Changes in Net Assets. 11–9. Comprehensive Problem. As of July 1, 2011, the trial balance for Korner College was as follows: Debits Credits Cash Accounts Receivable Allowance for Uncollectible Accounts Accrued Interest Receivable Contributions Receivable Allowance for Uncollectible Contributions Loans to Students and Faculty Long-Term Investments Property, Plant, and Equipment Accumulated Depreciation— Property, Plant, and Equipment Accounts Payable Long-Term Debt: Current Installment Long-Term Debt: Noncurrent Net Assets—Unrestricted—Board Designated Net Assets—Unrestricted—Undesignated Net Assets—Temporarily Restricted Net Assets—Permanently Restricted Totals $ 618,000 1,350,000 49,000 5,425,000 350,000 15,500,000 15,450,000 $38,742,000 $ 60,000 125,000 7,530,000 520,000 150,000 8,500,000 2,400,000 3,815,000 5,555,000 10,087,000 $38,742,000 During the year ended June 30, 2012, the following transactions occurred: 1. Cash collections included: accounts receivable, $1,200,000; accrued in- terest receivable, $49,000; contributions receivable, $5,345,000; and for loans to students and faculty, $155,000. Of the contributions, $1,900,000 was for plant acquisition (use for cash flow statement). 2. Cash payments included accounts payable, $520,000; and the current portion of long-term debt, $150,000. 3. Unrestricted revenues included tuition and fees, $21,800,000; unre- stricted income on endowment investments, $400,000; other invest- ment income, $300,000; and sales and services of auxiliary enterprises, $14,740,000. A total of $33,690,000 in cash was received, and the fol- lowing receivables were increased: accounts receivable, $3,500,000; accrued interest receivable, $50,000. 4. Scholarships, for which no services were required, were applied to stu- dent accounts in the amount of $2,200,000. cop2705X_Ch11_335-361.indd 358cop2705X_Ch11_335-361.indd 358 2/1/10 6:19:29 PM2/1/10 6:19:29 PM Apago PDF Enhancer College and University Accounting—Private Institutions 359 5. Contributions were received in the following amounts: unrestricted, $4,900,000; temporarily restricted, $5,400,000; permanently restricted, $2,000,000. Of that amount, $7,020,000 was received in cash; contribu- tions receivable increased $5,280,000. None of these contributions were restricted to plant acquisition. 6. Accounts receivable were written off in the amount of $50,000, and contributions receivable were written off in the amount of $20,000. Provisions for bad debts were increased by $125,000 for accounts re- ceivable (tuition and fees) and by $30,000 for unrestricted contributions receivable. 7. Expenses, exclusive of depreciation and uncollectible accounts, were as follows: instruction, $18,460,000; research, $1,980,000; public service, $1,910,000; academic support, $990,000; student services, $1,310,000; institutional support, $1,050,000; and auxiliary enterprises, $13,500,000. The college had an uninsured flood loss in the amount of $600,000. Cash was paid in the amount of $39,200,000, and accounts payable increased by $600,000. 8. Depreciation was charged in the amount of $1,500,000. One-third of that amount was charged each to instruction, institutional support, and auxiliary enterprises. 9. Interest income was earned as follows: addition to temporarily restricted net assets, $30,000; addition to permanently restricted net assets, $35,000. Of those amounts, $55,000 was received in cash and $10,000 was accrued at year-end. 10. Research expense was incurred in the amount of $1,700,000; and prop- erty, plant, and equipment were acquired in the amount of $1,400,000. Both were paid in cash. 11. Reclassifications were made from temporarily restricted to unrestricted net assets as follows: on the basis of time restrictions, $1,600,000; for program restrictions (research), $1,700,000; and for fixed asset acquisi- tion restrictions, $1,400,000. Korner records fixed assets as increases in unrestricted net assets. 12. Long-term investments, with a carrying value of $1,700,000, were sold for $1,770,000. Of the $70,000 gain, $40,000 was temporarily restricted by donor agreement and $30,000 is required to be added to permanently restricted net assets. 13. Additional investments were purchased in the amount of $3,970,000. Loans were made to students and faculty in the amount of $200,000. 14. In addition to 13 above, the board of trustees decided to purchase $2,000,000 in long-term investments, from unrestricted net assets, to create a quasi-endowment. cop2705X_Ch11_335-361.indd 359cop2705X_Ch11_335-361.indd 359 2/1/10 6:19:29 PM2/1/10 6:19:29 PM Apago PDF Enhancer 360 Chapter 11 15. At year-end, the fair value of investments increased by $530,000. Of that amount, $300,000 increased unrestricted net assets, $30,000 increased temporarily restricted net assets, and $200,000 increased permanently restricted net assets. 16. $150,000 of the long-term debt was reclassified as a current liability. 17. Closing entries were prepared for ( a ) unrestricted net assets, ( b ) tempo- rarily restricted net assets, and ( c ) permanently restricted net assets. Required: a. Prepare journal entries for each of the above transactions. b. Prepare a Statement of Unrestricted Revenues, Expenses, and Other Changes in Unrestricted Net Assets for Korner College for the fiscal year ended June 30, 2012. c. Prepare a Statement of Changes in Net Assets for Korner College for the fiscal year ended June 30, 2012. d. Prepare a Statement of Financial Position for Korner College as of June 30, 2012. e. Prepare a Statement of Cash Flows for Korner College for the year ended June 30, 2012. Use the indirect method. Excel-Based Problem 11–10. Presented below are comparative post-closing trial balances for a college. In addition, cash transactions for the year ended December 31, 2012, are summarized in the T-account. December 31, 2011 December 31, 2012 Increase (Decrease) Debits Cash Student Accounts Receivable Endowment Investments Property, Plant, and Equipment $1,650,000 170,000 2,500,000 4,875,000 $1,925,700 147,000 2,600,000 5,167,000 $275,700 (23,000) 100,000 292,000 Credits Accumulated Depreciation Accounts Payable Accrued Interest Payable Long-term Debt Net Assets 2,107,000 37,500 1,500 2,282,000 $4,767,000 2,557,000 46,200 1,000 2,189,000 $5,046,500 450,000 8,700 (500) (93,000) $279,500 cop2705X_Ch11_335-361.indd 360cop2705X_Ch11_335-361.indd 360 2/1/10 6:19:29 PM2/1/10 6:19:29 PM Apago PDF Enhancer College and University Accounting—Private Institutions 361 Cash Beginning balance 1/1/2012 Student Tuition and Fees State Appropriations Contributions to Endowment Federal Grants Investment Income $1,650,000 1,531,000 700,000 105,700 175,000 66,000 $1,200,000 597,300 19,700 292,000 93,000 $100,000 Salaries Operating Expenses Interest Equipment Purchases Payment Principal LT Debt Purchase Endowment Investments Ending balance 12/31/2012 $1,925,700 Comparative activity statements have been prepared for the year ended December 31, 2012, assuming the college is: (a) a private not-for-profit (Statement of Activities) and ( b ) a public college (Statement of Revenues, Expenses, and Changes in Fund Net Assets). These are provided in the first tab of the Excel file template. Using the information above and the Excel template provided, prepare statements of cash flow assuming the college is: ( a ) a private not-for-profit and ( b ) a public college. Assume that all long-term debt is associated with the purchase of property, plant, and equipment. cop2705X_Ch11_335-361.indd 361cop2705X_Ch11_335-361.indd 361 2/1/10 6:19:29 PM2/1/10 6:19:29 PM Apago PDF Enhancer Accounting for Hospitals and Other Health Care Providers My doctors told me I would never walk again. My mother told me I would. I believed my mother. (Wilma Rudolph, 1940–1994, three-time Olympic gold medal winner in track) America’s health care system is neither healthy, caring, nor a system. (Walter Cronkite, 1916–2009, anchor of the CBS Evening News for 19 years and was known as “the most trusted man in America”) Learning Objectives Describe the reporting requirements of varying types of health care • organizations. Apply the accrual basis of accounting in the recording of typical • transactions of a not-for-profit health care organization. Prepare the financial statements for a not-for-profit health care • organization. H ealth care expenditures now exceed $2.5 trillion or 17.6 percent of the gross national product of the United States, and this percentage is expected to grow in the future. A major national debate continues over how health care should be provided and paid for. Health care entities are subject to a complex set of regulatory requirements established by federal and state governments as well as by third-party payors, such as insurance companies. The relationships among physicians, patients, health care entities, insurance companies, and regulators have been changing, and many mergers have taken place, resulting in complex organizations that may in- clude several participants in the health care process. Health care accounting and auditing can provide an exciting and profitable career to individuals who are willing and able to deal with complexity and change. Chapter Twelve cop2705X_Ch12_362-385.indd 362cop2705X_Ch12_362-385.indd 362 2/1/10 6:21:40 PM2/1/10 6:21:40 PM [...].. .Accounting for Hospitals and Other Health Care Providers 363 Health care providers may be private not -for- profits, governmentally owned, or owned by private investors Like charities and private colleges, private not -for- profit health care organizations follow FASB standards In particular, several standards are written specifically for not -for- profits, including Statements 116, 117, 124, and 136... Exchange HCA and other private for- profit health care organizations follow FASB standards excluding those written specifically for not -for- profits While the three types of health care organizations follow different sets of generally accepted accounting standards, the differences lie mainly in presentation All three types of organizations measure assets and liabilities similarly, recognize revenue and expenses... the Not -for- Profit Guide as illustrated in Chapter 10 of this text The Health Care Guide calls these organizations Not -for- Profit Nonbusiness-Oriented Organizations ACCOUNTING AND REPORTING REQUIREMENTS OF THE HEALTH CARE GUIDE The AICPA Health Care Guide provides certain additional accounting and reporting requirements beyond those required by the FASB (Chapter 10) and the GASB (Chapter 6) standards... $42,686 of the restrictions Alternatively, much of that information could be presented in the notes to the financial statements Statement of Cash Flows Illustration 12–5 presents a Statement of Cash Flows for the Nonprofit Hospital using the indirect method The direct method is also acceptable (see Illustration 11–5) for private not -for- profit organizations and is required for governmental health care organizations. .. Accrual accounting applies in the same manner as it would for other commercial enterprises Equity accounts consist of paid in capital and retained earnings For further information on commercial accounting, consult intermediate and advanced accounting texts Apago PDF Enhancer SUMMARY AND CONCLUSIONS REGARDING HEALTH CARE ACCOUNTING AND REPORTING Health care entities may be private, not -for- profit, governmental, ... ILLUSTRATION 12–4 Statements of Financial Position NONPROFIT HOSPITAL Statements of Financial Position As of December 31, 2012 and 2011 (in thousands of dollars) Assets: Current Assets: Cash and Cash Equivalents Patient Accounts Receivable (Net of Allowance for Uncollectibles of $1,700 and $1,500) Contributions Receivable (Net of Allowance for Uncollectibles of $500 and $800) Supplies Total Current Assets Noncurrent... basis, and present comparable performance (i.e., income) measures Helping to assure comparability across health care organizations with varying ownership structures, the AICPA Audit and Accounting Guide: Health Care Organizations applies equally to private not -for- profit, governmentally owned, and investor-owned health care organizations. 1 This chapter concentrates on reporting by private not -for- profit... income and the cash flows from operating activities FINANCIAL REPORTING FOR COMMERCIAL (FOR- PROFIT) HEALTH CARE ENTITIES Health care entities that are investor-owned and are for- profit enterprises are subject to the FASB (category A GAAP) and the AICPA Health Care Guide (category B GAAP) However, none of the FASB pronouncements related to not -for- profit organizations, such as Statements 116 and 117,... comprehension of the chapter cop2705X_Ch12_362-385.indd 378 2/1/10 6:21:41 PM Accounting for Hospitals and Other Health Care Providers 379 Questions and Exercises 12–1 Describe the accounting treatment by hospitals and health care organizations for each of the following: a Charity care b Bad debts c Contractual adjustments 12–2 Describe the accounting treatment by hospitals and health care organizations for. .. commercial (for- profit) Private, not -for- profit, and commercial health care entities have Category A GAAP established by the Financial Accounting Standards Board State and local governmental health care entities follow the principles of the GASB All, however, are subject to the AICPA Health Care Guide, which is accepted by both FASB and GASB as being Category B GAAP This chapter has concentrated on accounting . the accrual basis of accounting in the recording of typical • transactions of a not -for- profit health care organization. Prepare the financial statements for a not -for- profit health care •. Exchange. HCA and other private for- profit health care organizations follow FASB standards excluding those written specifically for not -for- profits. While the three types of health care organizations. in the Not -for- Profit Guide as illus- trated in Chapter 10 of this text. The Health Care Guide calls these organizations Not -for- Profit Nonbusiness-Oriented Organizations. ACCOUNTING AND REPORTING