Thank you. I was trying to get a GAAP answer as the client does give their accrual financials to a bank. Internally prepared.
So, your article says you can elect to treat it as a grant deferred grant income liability to be offset when the qualifying expenses are paid. Which were all paid in the year ended October 2020. So I am taking that to mean that I can do what I want and debit the debt, credit income or offset the expenses and call it a day without violating GAAP rules for contingent income or something and will not be understating liabilities as the loan was formally forgiven in November for an October year end.
"Entities that expect to meet the PPP loan eligibility criteria for forgiveness and conclude that the PPP loan represents, in substance, a grant that is expected to be forgiven may elect to account for the PPP loan funds received as a grant.
If a for-profit business entity elects this option, the initial cash inflow from the PPP loan will be recorded as deferred grant income. Once there is reasonable assurance that the forgiveness conditions will be met, the entity will reduce the deferred grant income balance, with the offset through earnings, over the period of time that the entity recognizes the related eligible expenses. The entity may elect to record the offsetting credit through earnings as either other income or as a reduction of the related operating expenses.
Am I reading into that what I want it to mean?