Basis of Accounting and Principles of Consolidation. The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles”). The consolidated financial statements include the accounts of all of the entities outlined above. All intercompany transactions and balances have been eliminated. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates are made in the areas of patient accounts receivable, investments, accruals for settlements with third-party payors, reserves for losses and expenses related to health care professional and general liabilities, and risks and assumptions for measurement of pension and postretirement medical liabilities. Risks and Uncertainties Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is possible that changes in risks in the near term would materially affect the amounts reported in the consolidated balance sheets and the consolidated statements of operations. Cash and Cash Equivalents Cash equivalents consist of short-term, highly liquid investments, including repurchase obligations, which have maturities at the time of purchase of three months or less. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents approximate their fair value. Rockford Health System and Affiliated Corporations Notes to Consolidated Financial Statements December 31, 2013 and 2012 (in thousands of dollars) Inventory Inventory is valued at lower of cost or market, with cost determined using average cost method.
Basis of Accounting and Principles of Consolidation. The consolidated financial statements for Chenxin and its subsidiary for the years ended December 31, 2007 and 2008 are prepared in accordance with accounting principles generally accepted in United States of America (“GAAP”) and include the accounts of Hongkong Chenxin International Development Limited and Fuqing Guanwei Plastics Industry Company Limited (hereafter referred to as the (“Group”) for all periods presented. In preparing the consolidated financial statements presented herewith, all significant intercompany balances and transactions have been eliminated on consolidation.
