The AICPA has developed a Technical Question and Answer (TQA) 3200.18, Borrower Accounting for a Forgivable Loan Received Under the Small Business Administration Paycheck Protection Program, which provides additional guidance with respect to accounting for Paycheck Protection Program (PPP) loans in accordance with US GAAP. The TQA states that nongovernmental entities may account for PPP loans under FASB ASC Topic, 470, Debt, and that nongovernmental entities that are not nonprofit entities may account for the loans as government grants under certain circumstances. The TQA also explains that nonprofit entities that choose not to follow the Debt guidance should account for the loans as conditional contributions under FASB ASC Topic 958-605 if the entity expects to meet the PPP’s eligibility criteria and concludes that the PPP loan represents, in substance, a grant that is expected to be forgiven.
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