Clinical Laboratory Companies, Hospitals, and Other Providers Preparing to Comply with FASB’s ‘ASC 606–Revenue Recognition Standard’
All medical laboratory companies and hospitals following GAAP must comply as early as 2018 and 2019; revenue and profit impact can be either beneficial or negative
There is a big change coming to clinical laboratory companies, hospitals, and other providers that report their organization’s financial performance under Generally Accepted Accounting Principles (GAAP). Such organizations will need to assess their contracts in a different way to comply with the upcoming implementation of the Financial Accounting Standards Board (FASB) ASC 606: Revenue Recognition Standard.
Simply said, ASC 606 makes fundamental changes in the way all contracts must be analyzed and reported each quarter. Every lab company and organization that follows GAAP in their financial rules, and which is audited by an outside CPA firm, must comply with ASC 606. Moreover, when your lab company undergoes an outside audit, the auditor will verify that all contracts are being handled according to the requirements of the FASB ASC 606. (more…)