Disclosure Of Major Customers In The Health Care Industry

In 1979, the Financial Accounting Standards Board (FASB) recognized that adverse economic consequences could result when an enterprise relied on only a few major customers for its revenues. Based on that understanding, the FASB issued Statement of Financial Accounting Standards (SFAS) 30, which requires disclosure of relationships with customers who contributed 10% or more to revenues. Health care providers were excluded from the provisions of SFAS 30 as a result of the FASB's Technical Bulletin 79-5. Since 1979, the health care industry has changed dramatically; yet, the FASB has not reconsidered its original decision. The most comprehensive restructuring of payment systems in the history of the health care industry has raised issues concerning the financial viability of health care providers. The omission of disclosures concerning the degree of reliance on federal subsidy and discounted contracts limits the usefulness of financial statement information by suppressing key indicators of the future.