Hospital Corporation of America and Subsidiaries - Page 26

                                       - 26 -                                         
          corporate offices in Nashville.  Petitioners' hospitals are                 
          required to follow HCA's chart of accounts in recording all                 
          revenue and expense items.  The revenue and expense center                  
          section of the chart of accounts lists the functions that                   
          normally are performed in a hospital.  Each hospital is expected            
          to establish a functional cost center for each material function            
          that it performs.  The HCA chart of accounts gives individual               
          hospitals a certain degree of flexibility in selecting which                
          accounts to use to track costs and revenue.  Hospitals are                  
          permitted to establish separate, more detailed, accounts within             
          ranges prescribed by the chart of accounts.  For example,                   
          hospitals might establish separate accounts, within the                     
          prescribed range, to record revenue and expenses related to the             
          use of medical supplies in the operating room, the emergency                
          room, and other areas of the hospital.                                      
               The HCA chart of accounts is based upon the Chart of                   
          Accounts for Hospitals published by the American Hospital                   
          Association (AHA).  The AHA strongly recommends to its member               
          hospitals the use of an accrual method of accounting for                    
          financial accounting purposes to insure completeness, accuracy,             
          and meaningfulness of accounting data.                                      
          Accounting Methods Used by Petitioners and in the Hospital                  
          Industry                                                                    
               Before 1987, for financial reporting purposes, many non-               
          profit and for-profit hospitals used an accrual method of                   





Page:  Previous  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  34  35  Next

Last modified: May 25, 2011