CHICAGO--(BUSINESS WIRE)--Changes issued by the Financial Accounting Standards Board (FASB) regarding refundable entrance fees for continuing care retirement communities (CCRCs) are not expected to have an effect on the CCRCs' ratings, according to a new Fitch Ratings report.
"Overall, Fitch views the FASB guidelines positively for the improved clarity and better consistency on the sector's treatment of refundable entrance fees," said Jim LeBuhn, Senior Director. "Certain ratios such as operating and excess margins and debt to capitalization will be negatively impacted by the accounting change. However, the changes are non-cash, and many of the key financial metrics used in Fitch's analysis will remain unaffected. Thus, the change in accounting treatment is not expected to have an impact on Fitch's CCRC credit ratings."
The full report, titled 'Accounting Change on Refundable Entrance Fees Not Expected to Affect Ratings', is available on the Fitch web site at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: Accounting Change on Refundable Entrance Fees Not Expected to Affect Ratings