AICPA Accounting Guidance for PPP Lenders

The AICPA and its Depository Institutions Expert Panel (DIEP) has released several Technical Questions and Answers (TQAs) to help depository institutions, credit unions, credit card companies, broker-dealers, insurance companies and other lenders appropriately account for the loans they distribute under the Paycheck Protection Program (PPP).

TQAs, PPP and COVID-19

The new TQAs include questions and answer questions under Q&A Section 2130, Receivables, and address how creditors may restructure loans made in response to COVID-19 that result in restructurings that are not troubled debt restructurings and include periods of reduced payments, including payment deferrals, fee waivers, extension of repayment terms or delays in payment. They also answer other related questions regarding the PPP, loan origination fees, and the SBA guarantee.

“Given the unique nature of the PPP, lenders have had many questions about how to account for these types of loans and report on their arrangements. These TQAs provide answers to technical accounting questions that are important for the appropriate financial reporting of PPP program loans and any concessions granted in light of the recent pandemic,” said Jason Brodmerkel, CPA, AICPA Senior Manager, Accounting Standards —Depository and Lending Institutions.

Guidance for PPP Lenders

The TQAs include the following:

  • Section TQA 2130.41 Determination of the Effective Interest Rate;  
  • Section TQA 2130.42 Classification of Advances Under the Paycheck Protection Program;  
  • Section TQA 2130.43 Consideration of the SBA Guarantee Under the Paycheck Protection Program; and
  • Section TQA 2130.44 Accounting for the Loan Origination Fee Received From the SBA.

COVID-19 (Coronavirus) Resources for Tax & Accounting Professionals

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