True. For tax filing purposes but not for financial accounting purposes. Here is a segment from PWC in accounting for PPP:But the PPP Loans given through the CARES act specifically state that they will not be included in income if they are forgiven.
You would create a journal entry debiting 'Other Income' and crediting the liability account. This will move the funds over to your P & L.Dear All,
I posted a similar question months ago, now we have spent all PPP loan. My question is that how should we account for the forgiven amount? My original amount hit both cash and liability account though.
I'm a CPA who specializes in tax accounting. I had a complicated issue concerning a reduced price in an installment sale. Years ago there was a great accounting forum that I believe was associated with Intuit. I thought it had morphed into this forum but no. That forum only allowed CPAs. Still searching!Our CPA instructed us to do this when the loan is forgiven. Not sure where the confusion lays, but it sounds like you have a stronger grasp of how this should be handled.
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