Example
Vanguard adopted the update early, and its financial statement is presented below. Provision for doubtful accounts is subtracted from patient service revenue to produce net patient service revenue: Vanguard Health Systems, Inc. Unaudited Pro Forma Condensed Combined Statement of Operations For the Year Ended June 30, 2011
bad debt were not consistent due to the nature of these differences. Rehabilitation facilities, emergency care centers, hospitals and medical group practices are different in their billing and delivery of patient service revenue. In the health care services industry, patients are not typical of other consumers of services. For example, patient service revenue may be associated with third-party payer coverage or patients who are uninsured. Therefore, there are differences in the methods for assessing uncollectible accounts that require qualitative and quantitative disclosure. Joan DiSalvio, CPA, Ph.D., M.B.A., M.S., is an accounting professor at Fairleigh Dickinson University. She is a member of the New Jersey Society of CPAs Accounting & Auditing Standards Interest Group. Contact her at disalvio99@aol. com. Paul Lynch, Ph.D., M.B.A., M.A., is an accounting professor at Fordham University. Contact him at bpalynch@fordham.edu.
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