| (C) The nonrefundable entrance fees paid by a resident upon entering into a continuing care contract shall be treated as deferred revenue to be amortized over each group of residents' estimated remaining lives using a method that properly matches revenues with expenses. (D) The refundable portion of the entrance fee shall be recorded as a liability. (2) The basic audited financial statements filed with the disclosure statement shall include at least the items listed in subparagraphs (A)-(D) of this subsection: (A) a statement of activity (a statement of support, revenue, expense); (B) a statement of changes in fund balances; (C) a statement of changes in financial position prepared on a cash flow basis; and (D) notes to accompany the financial statements considered necessary to full disclosure or
adequate understanding of the financial statements, financial condition, and operation. (3) Accompanying the basic financial statements described in paragraphs (1) and (2) of this subsection shall be a reconciliation of the cash flow statement to the statement of revenue and expenses, and a comparison of pro-forma projections for the period to actual results, including an explanation of variances greater than plus or minus 10% in a line item, and an explanation of variances which are greater in dollar amount than total net income or loss. The comparison shall also include actual beginning and ending occupancy rates for living units, and actual number of occupied bed-days for nursing care units. The reconciliation and comparisons required by this paragraph are not required to be included within the audit of the financial statements, and may be prepared by the management of the facility or by the preparers of the audited financial statements.
(f) Continuing Care Contract Liens. To secure the obligations of the provider under any continuing care contract, a lien attaches on the date a resident first occupies a facility. The lien covers the real and personal property of the provider located at the facility. The provider shall submit to the department a written notice sworn to by an officer of the provider for each county where the provider has a facility on CCRC Form Number 13 (Notice of Lien). The provider shall file the notice of the lien with the department before the date of the execution of the first continuing care contract related to the facility.
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| Source Note: The provisions of this §33.505 adopted to be effective March 9, 1989, 14 TexReg 991; amended to be effective March 1, 1990, 15 TexReg 880; amended to be effective March 14, 1996, 21 TexReg 1771.
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