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AICPA issues guidance on accounting for forgivable PPP loans

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https://www.journalofaccountancy.com/news/2020/jun/forgivable-ppp-loans-aicpa-accounting-guidance.html?utm_source=mnl:alerts&utm_medium=email&utm_campaign=10Jun2020&utm_content=headline

This is important information for for-profit and non-profit entities that have a US GAAP financial reporting requirement and received a SBA Payroll Protection Program loan (PPP).  This guidance from AICPA (and which was supported by FASB) provides guidance on the accounting treatment for funding received from a SBA PPP loan, which is it depends.  AICPA and SEC financial reporting heavyweights came to the conclusion that this funding could be treated either as a traditional loan, whereby any loan forgiveness would not be taken into income until a fully executed release of the obligation was made by the SBA or the representative lending agency or as a conditional grant, where income recognition is at the point in time when the conditions of the grant are met.  The AICPA had to look to International Accounting Standards and US non-profit accounting standards to gather the accounting under the conditional grant method of forgiveness recognition.  But, this interpretation would follow if the reporting entity believed that the purpose of the PPP loan was essentially a government grant being made to them.