Section 442.11 - Accrual reporting

REPORTING PRINCIPALS

442.11 Accrual reporting. (1310) (a) In order to provide the necessary completeness, accuracy and meaningfulness in reporting data, accrual basis of accounting is required. Accrual accounting is the recognizing and recording of the effects of transactions and other events on the assets and liabilities of the hospital entity in the time periods to which they relate rather than only when cash is received or paid. For example, the writing off to expense each year of one third of the cost of a three-year insurance policy. We recognize that the immediate implementation of this policy may create a hardship for those hospitals currently on a cash basis. Because of this, a waiver of this rule will apply to cash basis hospitals for the first two reporting periods. At the end of this grace period, all reports must be on the accrual basis. Earlier compliance is encouraged.

(b) Requests for waivers of the accrual reporting requirement will be considered where a State law requires government hospitals to use other than full accrual accounting. The fiscal intermediary, after obtaining approval from the Health Care Financing Agency (HCFA), may grant such a waiver subject to review and revocation.
 

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