Banking
Loan Origination Fee — Deferred (EIR Method)
Collecting an upfront loan processing fee that must be deferred under the Effective Interest Rate method.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash / Customer Account | Asset (+) | 500.00 | - |
| Loans & Advances (Net — EIR Adjustment) | Asset (-) | - | 500.00 |
💡 Accountant's Note
Under IFRS 9, loan origination fees are not recognized as immediate income. They are deducted from the loan's carrying amount and amortized over the loan life using the Effective Interest Rate method, increasing the effective yield.
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