EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
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The CARES Act created the Paycheck Protection Program (PPP) to provide certain small businesses with liquidity to support their operations during the COVID-19 pandemic. Our publication discusses the accounting for PPP proceeds, as either debt or a government grant, which may depend on whether an entity expects to meet the eligibility and loan forgiveness criteria. Entities have to meet certain eligibility requirements to receive PPP loans, and they must maintain specified levels of payroll and employment to have the loans forgiven. Entities that receive PPP loans should monitor developments because the US Small Business Administration is expected to provide more guidance to address questions about the program.