Banking
Letter of Credit Issued — Contingent Liability
The bank issues an import LC on behalf of a customer — commitment recorded off-balance sheet.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| LC Commitments (Off-Balance Sheet Memo) | Contingent Asset (+) | 200,000.00 | - |
| Contingent Liabilities — LC Issued | Contingent Liability (+) | - | 200,000.00 |
💡 Accountant's Note
An LC is a contingent liability — the bank only pays if the customer defaults after goods are shipped. It is disclosed off-balance-sheet until the LC is drawn. ECL provisioning for undrawn LCs is required under IFRS 9.
Professional Excel Template
Get the automated version of this entry. Includes built-in IFRS checks, VAT calculators, and SAP-ready upload formats.
QA
Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.