PPP loans: Debits, credits, and financial reporting FAQS
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PPP loans: Debits, credits, and financial reporting FAQS

Feb 01, 2021 · 334.4 KB Download

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Part of the CPEA PPP Loan series

With the volume of businesses who have received PPP loans over the last few years there has been an explosion of inquires asking the CPEA for guidance on how to record these loans in the accounting records. That question is dependent on how the loans themselves are being accounted for. In this report we outline three models for accounting for PPP loans- Under ASC 470 as debt, under IAS 20 as a government grant, and under ASC 958-605 as a conditional contribution. For each, we then answer the same basic questions:

  • Who can use this model?

  • What is the journal entry when the money is received?

  • How do I account for the costs?

  • What is the entry when I receive forgiveness?

  • How does it show up on the balance sheet, income statement and statement of cash flows?

  • What disclosures are required?

Download the report on PPP Loan journal entries and disclosures

File name: CPEA PPP debits and credits.pdf

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