Banking
Bank Guarantee (LG) Issued
Issuing a performance guarantee for a contractor client participating in a government tender.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Guarantee Commitments (Off-Balance Sheet) | Contingent Liability (+) | - | 500,000.00 |
| Guarantee Assets (Memo) | Contingent Asset (+) | 500,000.00 | - |
💡 Accountant's Note
Bank guarantees are contingent liabilities disclosed off-balance-sheet. The bank will only pay if the contractor defaults. ECL provisioning and margin deposits apply similarly to LCs.
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