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How should institutions account for SBA Paycheck Protection Program (PPP) loans, payments, guarantees, and fees?

Institutions are encouraged to consult their accountants. The regulatory reporting requirements applicable to the Call Report should conform to U.S. GAAP. The following provides summary guidance for regulatory reporting purposes:

  • Institutions should report extensions of credit made within the SBA’s PPP as loans.
  • The accounting and reporting for fees received in connection with a PPP loan will depend on the institution’s intent and accounting for the loan (e.g., held for investment or intent to sell).
  • The SBA guarantee should be considered in estimating credit losses on the originated loan.
  • Payments received from the borrower or the SBA (including forgiveness) prior to the maturity of the loan, other than required payments of principal and interest, are considered prepayments.
  • FDIC FAQs on the SBA PPP, Accounting and Regulatory Reporting (pages 9-10)

On June 30, 2020, the American Institute of Certified Public Accountants (AICPA) and its Depository Institutions Expert Panel released a Technical Questions and Answers that discussed the accounting for the fee received or receivable from the SBA for originating the loan and the SBA guarantee and its interaction in estimating credit losses on the associated loan.

AICPA Technical Questions and Answers – Section 2130.42-.44, PPP tqa-section-2130-42-44.pdf