Guidance Summary for the Valuation of Medical Product Gifts -In-Kind :
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A Framework for Rational Decision Making
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Guidance Summary for the Valuation of Medical Product Gifts -In-Kind :. A Framework for Rational Decision Making. Health Companies. Humanitarian NGOs. Alcon Abbott Laboratories Fund Baxter BD Boehringer Ingelheim Cares Foundation Bristol-Myers Squibb Co. Eli Lilly and Company - PowerPoint PPT Presentation
Transcript of Guidance Summary for the Valuation of Medical Product Gifts -In-Kind :
A Framework for Rational Decision Making
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Health Companies
AlconAbbott Laboratories FundBaxterBDBoehringer Ingelheim Cares FoundationBristol-Myers Squibb Co.Eli Lilly and CompanyGenzymeGlaxoSmithKlineHospira, Inc.Johnson & JohnsonMerck & Co., Inc.Pfizer, Inc.sanofi-aventis US
Humanitarian NGOs
AmeriCaresCatholic Medical Mission BoardDirect Relief InternationalHeart to Heart InternationalInternational Aid, Inc.Map InternationalMercy Medical Corps Mercy ShipsNational Cancer CoalitionMedical Teams InternationalProject HOPEU.S. Fund for UNICEFTulipeWorld Vision
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Seven Components
1. Assessment
2. Appropriateness
3. Quality & Quantity
4. Packaging
5. Transportation
6. Human Resources
7. Evaluation
Why add medical product valuation?
There are many legitimate approaches to valuation that are socially relevant and ensure compliance with required financial accounting standards.
The project is an effort to find common ground among often disparate opinions.
Goal to create a white paper or standards.
But first, there are three major challenges to address……
Exit price notion, from market participant perspective (ASC 820-10-30-2)
The transaction to sell the asset occurs in the principal market (i.e. provides the greatest volume and level of activity for the asset) or the most advantageous market (i.e. maximizes the amount received from a sale) if a principal market is not available (ASC 820-10-35-5)
They should not be adjusted for transaction costs (ASC 820-10-35-7).
They assume the highest and best use of the asset by market participants (i.e. maximizes the value of the assets) (ASC 820-10-35-10).
Real Change Takes Time
Due process means that any person (organization, company, government agency, individual, etc.) with a direct and material interest has a right to participate by:
a) expressing a position and its basis, b) having that position considered, and c) having the right to appeal.
Due process allows for equity and fair play. The following constitute the minimum acceptable due process requirements for the development of consensus.
Principles Standards or guidelines White paper Examples Tools: a decision tree
It is not meant as a replacement for any NPO’s professional financial review and interpretation of GAAP.
Developed to inform the valuation process used by non-profits to assign a financial value to medical product donations. Also provides a foundation for standards.
Transparency Compliance Relevance Proper documentation Patient centered donations
There should be a clear and transparent donation valuation framework that complies with all applicable external accounting requirements.
Valuation frameworks must be GAAP compliant, subject to accounting interpretation within the law, but consistent in application.
The valuation framework should reflect the wide range of products, sources, markets and recipients.
The valuation process should be documented through written procedures and practices and published as part of an organization’s financial statements.
Primary focus should remain on the recipients; the community, the receiving institution, and the patient.
Where there is a conflict between valuation and service to this population, we will make decisions that first do no harm to the recipients, within the law.
Expansion of Principles into Guidelines/Standards
Public Comment Period
◦Survey on PQMD.org and email
Revisions and Final Comment Period
Publication
Contact: [email protected]
