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Fair Value Measurement of Financial Instruments

   

Added on  2019-09-19

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Harris Memorial Hospital and Harris Community FoundationYears Ended December 31, 20X7 and 20X6ContentsReport of Independent Auditors225Combined Financial StatementsCombined Balance Sheets226Combined Statements of Operations227Combined Statements of Changes in Net Assets228Combined Statements of Cash Flows229Notes to Combined Financial Statements231Report of Independent Auditors—Pennypacker & Vandelay, LLCThe Board of TrusteesHarris Memorial Hospital and Harris Community FoundationWe have audited the accompanying combined balance sheets of Harris Memorial Hospital and Harris Community Foundation and subsidiaries (the Foundation) as of December 31, 20X7 and 20X6, and the related combined statements of operations, changes in net assets, and cash flows for the yearsthen ended.Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
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Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making this risk assessment, we consider internal control relevant to the Foundation’s preparation and fair presentation of the consolidated financial statements in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Foundation’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our audit opinion.In our opinion, the financial statements referred to above present fairly, in allmaterial respects, the combined financial position of Harris Memorial Hospital and Harris Community Foundation and subsidiaries at December 31,20X7 and 20X6, and the combined changes in their net assets and their cashflows for the years then ended in conformity with U.S. generally accepted accounting principles.TABLE9A-1Harris Memorial Hospital and Harris Community Foundation Combined Balance Sheets (in Thousands)December 31,20X7December 31,20X6AssetsCurrent assets
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TABLE9A-1Harris Memorial Hospital and Harris Community Foundation Combined Balance Sheets (in Thousands)December 31,20X7December 31,20X6Cash and cash equivalents$82,815$59,696Assets limited as to use, current portion5,3275,088Accounts receivablePatients, less allowance for doubtful accounts ($25,302 in 20X7 and $23,014 in 20X6)70,02559,939Other28,99024,995Supplies7,0786,663Total current assets194,235156,381Assets limited as to useFor donor-restricted purposes84,44067,826Board designated for specific purposes382,835378,413Held by trustees under bond agreements51,03825,937518,313472,176Less current portion5,3275,088512,986467,088Property and equipment, net563,349458,829Other assets34,47634,302Total assets$1,305,046$1,116,600Liabilities and net assets
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TABLE9A-1Harris Memorial Hospital and Harris Community Foundation Combined Balance Sheets (in Thousands)December 31,20X7December 31,20X6Current liabilitiesAccounts payable$32,572$24,631Accrued expenses and other liabilities58,87853,725Due to third-party payers7,38012,633Current maturities of long-term debt4,6925,908Total current liabilities103,52296,897Long-term debt, less current maturities439,597332,354Contingent professional liabilities33,26048,487Due to broker15,12819,608Other liabilities20,7135,298Postretirement benefit obligation, other than pensions8,2077,694Total liabilities620,427510,338Net assetsUnrestricted600,179538,436Temporarily restricted55,21340,393Permanently restricted29,22727,433Total net assets684,619606,262Total liabilities and net assets$1,305,046$1,116,600
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TABLE9A-2Harris Memorial Hospital and Harris Community Foundation Combined Statements of Operations (in Thousands)December 31,20X7December 31,20X6Operating revenues and other supportNet patient service revenue$829,005$774,662Provision for doubtful accounts(55,851)(57,975)Net patient service revenue less provision for doubtful accounts773,154716,687Other operating revenue27,05529,334Total operating revenue800,209746,021Operating expensesSalaries and wages$371,449$329,668Employee benefits81,53277,231Supplies and purchased services228,244225,497Advertising3,0722,376Staff enrichment10,7678,591Occupancy cost14,34613,442Depreciation44,39241,627Interest10,9746,145Operating expenses764,776704,577Excess of revenue over expenses35,43341,444Nonoperating gains (losses)
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TABLE9A-2Harris Memorial Hospital and Harris Community Foundation Combined Statements of Operations (in Thousands)December 31,20X7December 31,20X6Contributions, gifts, and bequests3,1891,318Net assets released from restrictions for research expenditures14,07014,474Research, education, and other nonoperating expenses(22,980)(24,773)Change in interest rate swap value and put agreements1,5789,397Investment income30,45318,40226,31018,818Excess of revenues and gains over expenses and losses$61,743$60,262TABLE9A-3Harris Memorial Hospital and Harris Community Foundation Combined Statements of Changes in Net Assets (in Thousands)December 31, 20X7December 31, 20X6Unrestricted net assetsExcess of revenues and gains over expenses and losses$61,743$60,262Net assets released from restrictions for capital expenditures119Cumulative effect of change in accounting principle(3,943)Increase in unrestricted net assets61,74356,438
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