Bank charges in statement of profit and loss account.

Dear Sir,
            Can any one tell me the accoding to schedule iii of companies act, 2013 is this right to show bank charges under finance charges or show it on other Exp.  in statement of profit and loss Account.

 

Replies (2)

If the bank charges are related to borrowings, then it shall be classified as ‘other borrowing costs’ under ‘finance costs’ or else record as ‘other expenses’ in case of normal banking operations.

Hi,

In Financials, the descripttion is Finance cost & not "Borrowing costs". So, all the cost relating to fianance are shown as Finance costs. So Bank charges are also fiance costs. I have seen many prominent companies classifying the bank charges as finance costs & not as other expenses. Moreover it will give users of FS a better idea. 

 

Thanks 

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