Accounting of commitment fees

Created by Erik Åkerlund, Modified on Mon, 20 Feb 2023 at 02:28 PM by Erik Åkerlund

In this article we will explain realised and unrealised accounting for commitment fees.


Realized Commitment fees

The commitment fee has its own 'Amount type', meaning that it is possible to have a separate account for the commitment fee that differs from the account used for the interest expenses on the loans/draw-downs.


Unrealized Commitment fees

For commitment fee paid in arrears 

Accounting is accomplished in the same way as for Accrued interest.

Debit
Credit
Account
Amount type
Account
Amount type
Profit/loss account 8XXX
Accr comm fee
Balance sheet account 2XXX
Value Accr comm fee


For commitment fees paid in advance

Prerequisite: The total fee amount is booked as an expense on a profit/loss account when it is paid (event maturity).

Month end: The prepaid remaining fee is booked to deduct the prepaid amount. The most common choice is to reverse the remaining expenses first day in coming month and book new remaining fees the following month end.

Debit
Credit
Account
Amount type
Account
Amount type
Balance sheet account 2XXX
Val Comfee pre remain
Profit/loss account 8XXX
Comfee pre remain

Comfee pre remain

Note! Should be the same account as the paid, realized fee was booked on

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