Startup costs

In the first stages of operation, a new facility incurs certain costs in developing its ability to care for residents prior to admission. Staff is obtained and organized, and other operating costs are incurred during this time of preparation that cannot be allocated to resident care because there are no residents receiving services. These costs are commonly referred to as startup costs. Actual allowable startup costs may be considered as deferred charges and allocated over a number of periods that benefit from the costs. Where a facility has properly capitalized startup costs as a deferred charge, the startup costs must be recognized as allowable costs amortized over sixty consecutive months starting with the month in which the first resident is admitted.