While ASC 405 addresses the accounting for deposit liabilities, it does not address revenue recognition for the various types of fees that financial institutions earn in conjunction with deposit accounts. In Oracle Banking Trade Finance various charges such as handling charges, SWIFT charges, etc. can be processed. The commissions and charges can be collected from any party, and if necessary, debited from a receivable account and liquidated subsequently. Message From the Office of the Chief Accountant The Office of the Chief Accountant (OCA) is pleased to present the August 2026 edition of the Bank Accounting Advisory Series (BAAS). The BAAS expresses the OCA’s interpretations of accounting topics relevant to national banks and federal savings associations (collectively, banks or institutions, unless otherwise specified). It does not. The LC Accountant must be aware of all journal entries and accounting treatment of letters of credit. The accounting treatment varies by type of letter of credit and depending on the nature of the dealing with the supplier and the bank. LC can be for both Imported and Domestic purchases. For Imported purchases,it is called FLC. For local purchases,it is called ILC. CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online. The standard journal entry involves debiting an appropriate expense account, such as 'Bank Charges Expense,' 'Trade Finance Fees,' or 'Letter of Credit Expense,' and crediting your cash or bank account. What are the common debit and credit accounts used in an LC commission income journal entry? The primary accounts affected are an asset account (Debit: Cash if received, or Accounts Receivable if not yet received) and a revenue account (Credit: LC Commission and Charges Income). The bank transaction journal entries below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting of banking transactions. Most LC cost overruns happen because fees are not priced into the deal or not allocated correctly between buyer/seller and issuing/advising/confirming banks. The fix is simple: list the fee types, decide who pays each one, and store it as a deal rule before issuing the LC. Here’s a detailed accounting entry process for a bank when handling a Letter of Credit (LC) and a Bank Guarantee (BG), covering entries for issuance, fee collection, closure, and.