Lenders Making Government Virus Loans Get Accounting Guidance

Banks, credit unions, and other lenders that distribute government-backed forgivable loans to customers should account for these loans as just that—loans, the American Institute of CPAs said in guidance.

“The instrument is legally a loan with a stated principal, interest, and maturity date,” the CPA group said in the non-binding guidance issued Tuesday. “The institution is expected to collect amounts due from either the borrower or the Small Business Administration (SBA) as guarantor. The institution should account for this instrument as a loan,” the guidance said.

The third coronavirus relief package signed into law in late March (Public Law ...