Transaction Accounting Issues for Not-For-Profit Hospitals

Allocation of Assets in Acquisitions - 2013

Net Working Capital

Intangible Assets

Fixed Assets

Goodwill

Other Assets

Total

Seller

Audrain Health Care, Inc.

40.4% 10.7% 49.2% 11.4%

34.4% 46.4% 21.6% 39.8%

23.6% 40.8%

0.0% 2.1%

1.6% 0.0% 0.4% 0.2% 0.0% 4.6% 0.0% 3.1% 0.0% 46.0% 23.5%

100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Cascade, Longleaf, and The Refuge

Dean Health Systems, Inc. Marian Health System, Inc.

8.2% 0.0%

20.6%

2.8%

Racine Emergency Physicians, SC

0.0%

0.0%

55.3%

44.4%

Regina Medical Center

47.6%

52.4% 21.9%

0.0%

0.0% 1.5% 4.0%

Ten Broeck Tampa, Inc. and Capestrano Inv estment THG The Hospitalist Group LP and The Hospitalist Management Group, LLC, and MD @ Home Ltd.

5.9% 0.0%

66.0% 95.9% 30.4% 47.4%

0.0%

Vanguard Health Systems Inc. Walton Rehabilitation Hospital

16.5% -1.4% 25.3% 11.4% 18.7%

48.2% 39.1% 51.2% 39.1% 32.3%

1.7%

14.9%

Winter Hav en Hospital

0.0%

0.0%

Median Average

30.4% 33.4%

2.1% 8.4%

0.4% 7.2%

 Goodwill tends to comprise a large amount of the purchase price allocation as the benefits gained from the acquisition tend to surpass the fair value of the physical assets acquired.  Generally, fixed assets comprise a significant portion of the purchase price allocation as the buildings, land, and equipment purchased tend to be of high value.

The Impact of the Affordable Care Act and Transaction Accounting Issues for Not-For-Profit Hospitals

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