A FASB interpretation that went into effect in December might be a sleeper issue for hospitals as they prepare year-end financial statements. FIN 47 is an interpretation of FAS 143, Accounting for Asset Retirement Obligations. FIN 47 clarifies that when an organization has a legal obligation related to future environmental cleanup, the cost of that obligation needs to be recognized on the current year’s financial statement. The challenge for healthcare and other organizations is to identify the cost associated with that cleanup when future costs may not presently be known. Organizations that do not report these charges could find themselves with an audit opinion that notes material weaknesses in financial controls, according to a recent CFO.com article.
Read the HFMA Views post on FIN 47.
