Ask the Experts: EHR Software
My organization has significant electronic health record (EHR) software that has been fully depreciated and is included in its entirety within accumulated depreciation on our books. During the past several years, the organization has invested in numerous additional upgrades on our EHR software, which are currently being appropriately depreciated.
Is it acceptable practice to retire the original EHR software or any percentage given that numerous upgrades have occurred? Or is the acceptable practice to keep both the original software and all upgrades on the balance sheet until the legacy software is no longer in use?
Answer: If the upgrade (purchase) extends the useful life of the EHR, (i.e., adds more functionality) then yes, your organization should keep it on the books. It can keep both the existing and the new additional upgrades. If the upgrade is a replacement, your organization should write off the original EHR.
It is acceptable practice is to keep both the original software and all upgrades on the balance sheet until the legacy software is no longer in use.
This question was answered by: Rosemary Rotty, MHA, FHFMA, director, service line, finance, UMass Memorial Health Care, and is a member of HFMA’s Rhode Island Chapter.
|What do you think? Please share your thoughts on this question in the comments section below.|
The information provided through the Forum’s Ask the Expert service does not constitute legal advice, even when the advice is provided by lawyers. You need to obtain your own legal counsel for legal advice, and consider the laws and regulations that govern your state. The content and opinions expressed are those of the Forum experts, and not that of their employers or of HFMA. HFMA does not endorse the material or warrant or guarantee its accuracy. The responses are based only on the specific facts or circumstances provided. Forum experts cannot be held liable for outcomes related to any information provided.