Voluntary Health & Welfare
Organizations (VHWO’s)
 Examples:
YMCA
United Way
American Heart Association
 Most organizations are Non-Gov’t,
but may receive some government
support.
Accounting Authority
GASB
Government
Supported
FASB
Non-Government
Supported (Most)
FAS #116 Impact
 Major – since contributions are major
sources of revenue.
FAS #117 Impact
 Major – since most VHWO’s prepared
financial statements on a disaggregated
(layered) basis.
Sources of Accounting Authority:
 AICPA Audit Guide
–Audits of VHWO’s (1974)
 Audit & Accounting Guide
–NPO’s (1996)
 SFAS #116
 SFAS #117
 SFAS #124, 133, and 135
Financial Statements
Statement of Financial Position
(Net Assets as to Restriction
Category)
Statement of Activities
Statement of Cash Flows
Statement of Functional
Expenses
VHWO Accounting Notes of
Importance…
 Revenues
–Full Accrual Basis
–Gross Amounts
–Conditional & Unconditional
–Categories of Restrictions
–PV for Multiyear Contributions
VHWO Accounting Notes of
Importance…
 Expenses
– Full Accrual Basis
– Reported Only in Unrestricted Net
Asset Class
– Involves Reclassification of Use of
Temporarily Restricted Assets
– Reported by Function & Natural
Classification
Healthcare Accounting
 Types of Organizations
– Nongovernmental NFP
– Governmental
– Commercial (For-Profit)
 Financial Accounting Standards
– Category A: FASB & GASB
Hierarchy
– Category B: AICPA Healthcare Guide
(1997)
Healthcare Accounting
 Governmental, Nongovernmental NPO’s, and
Commercial Healthcare entities are similar.
– Business type activities (substantial % of
revenue is for services provided)
– AICPA instrumental in developing
standards for all types
– Therefore FASB & GASB have accepted
AICPA Audit Guide as category B GAAP
– FASB and GASB requirements are
supplemented by AICPA Guide
Financial Statements-NG
Statement of Operations
Statement of Changes in Net
Assets
Statement of Financial Position
Statement of Cash Flows
Governmental Hospitals
 Required to follow GASB #34 (Category A)
and AICPA Health Care Guide (Category B)
GAAP
 Reporting as—
– Special Purpose Government (Chapter 9)
• S of R, E, & Changes in NA may be two statements
as illustrated in Chapter 12
– Enterprise Fund (Illustrations 6-1, 6-2, 6-3)