Is a Statement of Changes in Net Assets required in healthcare financial statements?

The requirement for a Statement of Changes in Net Assets is grounded in the principles of financial reporting, particularly for non-profit organizations. For healthcare entities that operate as non-profits, the statement is crucial as it provides detailed insights into how the net assets of the organization fluctuate over a reporting period. This statement tracks changes due to various factors such as revenues, expenses, gains, losses, contributions, and distributions.

In the context of healthcare financial statements, the Statement of Changes in Net Assets is important because it allows stakeholders, including donors, management, and regulators, to understand the financial health and operational efficiency of a healthcare organization. It highlights how well the organization is managing its financial resources in relation to its mission of providing care.

For healthcare organizations structured as for-profits, while the focus may differ, non-profits are specifically required to provide this statement, reinforcing the answer that it is indeed required in the context of non-profit healthcare finance. This distinction is critical as it helps maintain transparency and accountability to stakeholders who are often focused on the broader social and community impact of their financial activities.