GAAP Accounting for Forgivable PPP Loans

The AICPA has released Technical Question and Answer (TQA) 3200.18, Borrower Accounting for a Forgivable Loan Received Under the Small Business Administration Paycheck Protection Program.

Not-for-profit entities follow the guidance for conditional contribution recognition:

  • initially record the cash inflow from the PPP loan as a refundable advance (liability)

  • reduce the refundable advance and recognize grant revenue once forgiveness criteria have been substantially met or explicitly waived

Business entities follow the guidance for gain contingency recognition:

  • initially record the cash inflow from the PPP loan as a liability

  • loan proceeds reported as a liability until conditions of release are realized or realizable, at which time revenue would be recognized and liability would be reduced

VISIT US

520 Pike Street
Suite 1040

Seattle, WA  98101-2397

CONTACT US

P: (206) 623-6116

F: (206) 623-6929

tma@tma-cpas.com

© 2019 by The Myers Associates, P.C. Proudly created with Wix.com