Banking
Loan Commitment Fee Income
Earning a quarterly fee on the undrawn portion of an approved revolving credit facility.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Customer Account (Fee Debit) | Liability (-) | 5,000.00 | - |
| Commitment Fee Income (Deferred) | Liability (+) | - | 5,000.00 |
💡 Accountant's Note
Commitment fees compensate the bank for reserving capital against undrawn facilities. Under IFRS 9, if the facility is expected to be drawn, the fee is deferred and incorporated into the EIR of the loan once drawn.
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