A two-part CPEA series
Accounting treatment of PPP loans
Resource available
Accounting considerations for PPP loans have evolved from when they were first issued. The first part of this series covers the initial CPEA thoughts on accounting considerations related to PPP loans and introduces the four methods of accounting for the loans under US GAAP:
FASB ASC 958-605 government grant model
IAS 20 model on government assistance
FASB ASC 470 debt model
FASB ASC 450-30 gain contingency model
In addition to covering the accounting models this report also delves into when the criteria associated with derecognition of the loans would be met as well as other considerations that both recipients of loans and their auditors should be aware of.
The second part of the report shifts the focus from the accounting at inception and qualifications for PPP loans to the timing and manner in which the loans are derecognized from the balance sheet. The topic is evaluated through a combination of interpretation of recent guidance, illustrative examples, and common questions we’ve received from CPEA members through the technical inquiry service.
Download the Initial CPEA PPP loan accounting report
File name: CPEA-fog-of-war-PPP-loan.pdf
Download the Timing and manner of derecognition report
File name: CPEA-derecognition-PPP.pdf
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