How to Record LC Reimbursement Fees
Accounting for charges levied by a third-party bank (reimbursing bank) for processing payments between the issuing and negotiating banks.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Finance Charges - Trade | Expense | 300.00 | - |
| Cash/Bank Account | Asset | - | 300.00 |
💡 Accountant's Note
In complex international trade, a reimbursing bank may be used to settle funds. The fees charged by this bank are recognized as finance charges by the applicant.
Practitioner & Systems Framework
💻 ERP Architecture
Capture as part of the total cost of the LC transaction in the treasury module.
⚠️ Audit Flags
Unexpected variances in LC settlement amounts due to undisclosed reimbursement fees.
📄 Required Documentation
MT740 or MT747 SWIFT messages and bank fee statements.
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Discussion & Community Questions
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