The Hospital Foundation is a legally separate, tax-exempt 501(c)(3) entity organized for the purpose of raising funds to provide scholarships only to academically qualified students at the Hospital Medical School. Members of the board of the Hospital Foundation are elected by the existing board of trustees. The foundation provides scholarships to students of the Hospital Medical School, but the foundation receives no financial support from the Hospital. In what manner would the Hospital include the foundation in its financial statements?
A) Blended.
B) Discretely presented.
C) Consolidated.
D) Note disclosure only.

Question

Quizplus · Accepted Answer

The Hospital Foundation should be discretely presented in the Hospital's financial statements because it is a legally separate, tax-exempt entity that is related to the Hospital through its purpose but operates independently without financial support from the Hospital. This approach allows the financial activities of the foundation to be reported in a manner that distinguishes them from the financial activities of the Hospital itself.

The Hospital Foundation Is a Legally Separate, Tax-Exempt 501(c)(3) Entity