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This alternative would benefit BHS by getting the money as soon as possible. Having full payment in hand reduces BHS' risk of future hospital nonpayment. However, many vendors have begun resisting extending the period of acceptance testing for UCC purposes due to the accounting profession's tendency to view such an arrangement as a continency and, therefore, not permitting BHS to recognize the full amount of such funds as revenue on its books. Particularly for those vendors with an eye towards a future initial public offering of stock, pretty financial statements are sometimes more important than short term cash.
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