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Business Bounce Back loan accounting

How to account for first year fees and interest

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Hello everybody

Recently saw an article on accounting web re how to post the fees and interest payments for the business bounce back loan, in particular the once for the first year.

As these are covered by the Government, the article said that the fees and interest need to be treated as grant income.  Can anyone post the link to that article here perhaps?

Many thanks.

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By Paul Crowley
14th Jul 2020 15:52

Only accountants care about this time-wasting nonsence. Agreement fees?

Thanks (2)
Hallerud at Easter
By DJKL
14th Jul 2020 16:06

FRS 102?

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Replying to DJKL:
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By Paul Crowley
14th Jul 2020 16:16

Even then materiality?

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Replying to Paul Crowley:
Hallerud at Easter
By DJKL
14th Jul 2020 16:20

I had/have just shy of £60k prepaid fees sitting on our balance sheet being released over ten years (since December 2016 drawdown), arrangements fees/costs can rack up. (Our profits, ignoring revaluations, tending towards the £500k level, so imho £60k is material)

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Replying to DJKL:
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By Paul Crowley
14th Jul 2020 16:25

That is a serious sized Bounceback loan
Most any of my clients got was £50,000.

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Replying to Paul Crowley:
Hallerud at Easter
By DJKL
15th Jul 2020 09:15

It is not a bounceback loan, just bank loans, but the concept is the same.

Thanks (1)
Replying to DJKL:
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By Paul Crowley
15th Jul 2020 09:44

Yes principle applies the same but I only work with mostly micro and do not intend to create confusion for non-sophisticated clients.
Only accountants care about complications and disclosures.
My clients really only interested in how much tax to be paid. HMRC pretty much the same, other than for related parties.

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By Mikesch
14th Jul 2020 16:30

Found it:

https://www.accountingweb.co.uk/tax/hmrc-policy/covid-19-accounting-cbil...

This is not the bounce back loan but I figured the same rules apply for posting government paid fees?

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Replying to Mikesch:
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By bernard michael
15th Jul 2020 09:33

There is no liability or payment or BIP so why should there be any accounting of non existent ephemeral transactions

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boat
By SouthCoastAcc
15th Jul 2020 19:11

I agree grant income and interest expense

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