Why is it almost never allowed to write up the cost of properties in a healthcare facility?

In the context of healthcare facilities, writing up the cost of properties refers to increasing the recorded value of these assets on the balance sheet. This practice is typically not allowed because it can lead to manipulation of asset valuation, which undermines the accuracy and reliability of financial reporting.

When asset values are artificially inflated, it creates a misleading picture of a healthcare facility's financial health and profitability. This can affect stakeholders' decisions, including investors, creditors, and regulatory bodies, who rely on accurate financial data to assess the facility's performance. Proper accounting practices aim to maintain transparency and integrity in financial statements, ensuring that the asset values accurately reflect their fair market value and actual investment.

While market fluctuations can influence asset value (the first option) and compliance with international accounting standards is necessary (the last option), the primary concern in healthcare accounting practice is the prevention of manipulation. Asset inflation can misguide decisions and disrupt the balance of financial integrity, which is why the prohibition against writing up asset costs is paramount.