Asset Valuation Methods In Healthcare Organizations

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Health care organizations are known to value assets on their historical or acquisition costs. What types of asset valuation methods are useful for finances, stocks, bonds, tax returns, and financial statements?
Response 5 As a potential CFO, valuing assets is a crucial need for not-for-profit health care organizations (NFP). A well-managed health care organization with auditors, management, and CFO would ensure the assets, stocks, bonds, tax returns, and financial statements are being valued thoroughly and accurately. First of all, fair value accounting can be used to determine by scrutinizing at published stock market trades. (GAAP) requires for assets, stocks, and bonds to be valued directly on fair value. Historical cost is a recommended
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How would you record the financial impact of our organization’s transactions and describe any other contributing factors to your process?
Response 1 The common method in for-profit organizations and can be used in not-for-profit organizations is T-accounts. Most health care organizations and for-profits use t-accounts to show impact of transactions. According to, (Finkler, S.A., Ward, D.M. & Calabrese, I.D. 2013), within the t-account any entries on the left side of the vertical line are debits, and any entries on the right side are credits. T-accounts can effectively be used for (NFP)’s even though they are not part of the accounting system. Negative signs are not used when creating t-accounts which can be a problem, but it’s the user’s responsibility to see if each designated account is increases with credit or
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My focus and steps to take is to use straight-line or accelerated depreciation. To ensure valuation of items and assets are properly evaluated and completely right, it is best to calculate the annual depreciation expense. Asset valuation is depicted as determining the full cost of the asset to be depreciated and it follows the rules for historical cost. Straight-line depreciation assumes that an equal share of the total depreciation is taken each year during the asset’s life, (Finkler, S.A., Ward, D.M. & Calabrese, I.D. 2013). Depending on the equipment or items for this method, the units of production, or units of activity method of depreciation is effective for equipment evaluation. Also, this method involves extra bookkeeping to track the annual production. The next methods are the accelerated known as declining balance method and sum-of-the year’s digits (SYD). Furthermore, the theory behind these methods are is that some assets are likely to decline in value more rapidly in the early years of their life than in the later years, (Finkler, S.A., Ward, D.M. & Calabrese, I.D. 2013). Both methods have useful purposes and must be considered carefully for the building, land, assets, or equipment. In the case of (NFP) organization, they don’t have to deal with income tax as opposed to (FP) organizations. These depreciation methods are the proven and right way for

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