Implications of new accounting rules for income taxes.

The provisions of the Financial Accounting Standards Board (FASB) Statement No. 109, Accounting for Income Taxes, require all organizations that issue financial statements to shift the focus of their accounting for income taxes from the income statement to the balance sheet. This change can alter significantly a healthcare organization's financial position. The change also may affect the way in which investors, lenders, regulators, and other users of financial statements evaluate corporations in the healthcare industry. Hospitals and other healthcare organizations, particularly for-profit organizations, therefore, should review carefully their methods of accounting for such items as deferred tax assets and loss and expense reserves.