AICPA Issues Technical Q&As Related to Health Care Entities

September 2, 2020

The AICPA has issued technical Q&As on the accounting for lease components in Type A life care contracts by continuing care retirement communities. Specifically, the Q&As discuss:

Embedded lease components within Type A life care contracts (Q&A Section 6400.56).
Determination of the lease term when an embedded lease component for an independent living unit is present within Type A life care contracts (Q&A Section 6400.57).
Classification of an embedded lease component within Type A life care contracts (Q&A Section 6400.58).
Nonlease components within the resident agreement of Type A life care contracts (Q&A Section 6400.59).
Measurement of lease payments if a lease for an independent living unit exists in a Type A life care contract (Q&A Section 6400.60).
Reassessment of lease term within the resident agreement of Type A life care contracts (Q&A Section 6400.61).
Impact on a lease component within the resident agreement of Type A life care contracts when a resident transitions to assisted living or skilled nursing (Q&A Section 6400.62).