TQAs address lease accounting for retirement communities

JofA article written by Ken Tysiac

 

Background and nonauthoritative guidance on lease accounting for continuing care retirement community Type A life care contracts is provided in Technical Questions and Answers (TQAs) published Monday by the AICPA.

Developed by the AICPA Health Care Expert Panel, TQAs 6400.55–.62 discuss how to:

• Determine whether an embedded lease exists under FASB ASC Topic 842, Leases;
• Identify the lease and nonlease components;
• Determine the lease payments;
• Evaluate the lease term; and
• Determine the lease classification.

The AICPA also issued in April TQAs 6400.53–.54, which discuss accounting for costs health care entities incur in the implementation of electronic health record systems for internal use, and financial presentation considerations related to transactions involving provider taxation programs and similar arrangements.

— Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is the JofA’s editorial director.