BBL accounting treatment
leeGrant77
Registered Posts: 19
Hey folks,
Im looking to get views on the accounting for Bounce back loans now we are getting to the time when accounts need to be filed and these loans accounted for.
My belief is the loan interest needs to be accounted for as Grant income and then offset to the interest account.
Worked example being
Loan for £50,000
DR Bank £50,000
CR Loan £50,000
First year interest is paid by the Gov and fixed at 2.5% so £1250
CR Other income £1250
DR Loan interest £1250
I would then pro rata this for the amount of months in the period
Is this the correct method?
Im looking to get views on the accounting for Bounce back loans now we are getting to the time when accounts need to be filed and these loans accounted for.
My belief is the loan interest needs to be accounted for as Grant income and then offset to the interest account.
Worked example being
Loan for £50,000
DR Bank £50,000
CR Loan £50,000
First year interest is paid by the Gov and fixed at 2.5% so £1250
CR Other income £1250
DR Loan interest £1250
I would then pro rata this for the amount of months in the period
Is this the correct method?
0
Comments
This is how I have understood it too. Have you had a look at the 'AAT Learning portal' and the 'Accounting for government grants under UK GAAP'?
Thanks for the update though, always nice to get reassurance