Regulations
What federal agency regulates both nonprofit blood centers and commercial plasma centers?
The FDA (US Food and Drug Administration)
Until what decade was paying for whole blood common in the US?
Up until the 1970s
When a donor gives one pint of whole blood to the American Red Cross for free, what journal entry is recorded?
No journal entry
What is the NFP equivalent of a “balance sheet” called?
Statement of Financial Position
How long does the physical process of drawing one pint of whole blood take?
8-10 minutes
What year did the FDA require that whole blood intended for transfusion be labeled as either voluntary or paid?
1978
What ethical concerns arise when economically vulnerable people donate plasma primarily?
Exploitation of Donors / distributive justice concerns
ADMA Biologics pays a plasma donor $50. What is the journal entry?
Raw material Inventory $50
Cash $50
Under current FASB standards, NFP net assets are divided into what two classifications?
With Donor restrictions and without donor restrictions
What percentage of whole blood volume is made up of plasma?
About 55%
What international body has, since 1975, encouraged all countries to use only voluntary, unpaid donors?
The World Health Organization (WHO)
After WW2, what were paid donors doing for monetary gain, which eventually shifted the industry towards an all volunteer blood system?
Conceal diseases / lie about viruses or health
ADMA uses processed plasma with a cost of $150 for research and development purposes. What is the journal entry?
R&D Expense $150
Inventory $150
What financial statement is required for NFPs but not for-profit companies, showing expenses by both function and nature?
Statement of Functional Expenses
What is the typical financial compensation range for a blood plasma donation?
$30 to $60 per donation
Per FDA rules, blood collected from voluntary donors cannot be sold until what two things occur?
It must be tested AND processed
What is the primary ethical argument IN FAVOR of compensating plasma donors?
Compensation fairly recognizes donors' time, physical discomfort, and the commercial value of their contributions
Amazon pledges $1M to ARC on May 30, conditional on blood collection. What entries do both ARC and Amazon make on May 30?
No journal entries
Under ASC 958-605, what must occur before an NFP can recognize revenue from a conditional contribution?
The condition must be met or overcome
How frequently can a person donate plasma?
Up to twice a week (104 times per year)
Why does the FDA not require plasma to be collected for manufacturing medicines to be labeled as paid or voluntary?
Because the manufacturing processes effectively eliminate viruses and bacteria, removing the safety concern that exists.
Name THREE distinct perspectives used to evaluate whether to allow payment for plasma donation
(1) Ethical implications, (2) Market Supply and Demand and (3) Public policy
A pint of blood costing $224 expires and is discarded. ARC pays $10 disposal. What is the full journal entry?
Loss on Disposal $234
Inventories $224
Cash $10
Why does ADMA record inventory when collecting plasma, while the ARC records no entry when collecting whole blood?
The ADMA purchases plasma for cash, while the ARC receives uncompensated, voluntary donations that have no fair value until testing is complete.
What IRS tax form do NFP entities have to file to ensure public accountability?
Form 990