Solution to Assignment Exercise 15-3
Each student’s solution will be unique. You will probably wish to require a written explanation of at least one page that
• summarizes the situation
• explains the options (separate accounting versus consolidated accounting)
• explains there is no guidance
• sets out the reasons why the issue should be handled either as separate or consolidated accounting.
(Note: the “better-safe-than-sorry” conservative approach would be to set the grant up with separate accounting. Another suggested solution would be to examine any other similar grants that the health system may have and follow the same procedure.)
Tip: this exercise is also useful as a discussion question for the class instead of making it an assignment.