How lenders should account for forgivable PPP loans

By Ken Tysiac

Lenders should account for the forgivable portion of a Paycheck Protection Program (PPP) loan as an interest-bearing loan until the receipt of payment for that loan from the US Small Business Administration (SBA), according to a Technical Question and Answer (TQA) posted Thursday by the AICPA.

The AICPA staff believes that for accounting purposes, payments received from the SBA should be treated similarly to payments received from the borrower. When payment is received from the borrower or the SBA (either in full or in part) before the loan matures, amounts received should be accounted for as a prepayment, according to TQA Section 2130.45.

In such situations, unamortized loan origination fees should be accounted for in accordance with FASB ASC 310-20, Receivables, Nonrefundable Fees and Other Costs, the TQA states.

Additional TQAs related to lender accounting and the PPP are available in TQA Sections 2130.41 through 2130.44.

For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP news.

Ken Tysiac ( is the JofA’s editorial director.


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