Business loan amortization

Hi

 

Im amortising 10 loans worth by looking at emi amounts in bank statement.  There is a slight difference between my excel emi calculator which is the same as banks online calculator and auditor told me that processing charges are allocated to emi. 

Is it not true that debentures have issue costs subtracted from the pv of proceeds received? 

I think issue costs were not paid and arranged this way. So doesnt the syllabus cover this?

Reg

Replies (6)
Quick Summary
This discussion clarifies how processing charges for business loans should be factored into EMI calculations, whether added to the loan or deducted. It also touches on the accounting treatment of debenture issue costs, noting they are usually subtracted from proceeds. The user found that including commissions and charges in the principal amount, and using Excel's Goal Seek, helped reconcile their amortisation schedule with actual payments, ensuring accurate tax-deductible interest calculations.

Processing charges on loans should be included in EMI calculations, whether deducted or added to the loan amount.

Debenture issue costs are typically subtracted from the proceeds received. If not paid upfront, they may be treated as expenses over time, affecting the income statement. The specific treatment depends on accounting standards and arrangements.

Business loan amortization processing charges.

So i manipulated the emi schedule to suit the actual payments made. Its a problem because interest is tax allowed expense isnt it. 

It's very difficult to manipulate.

I used goal seek in excel and it worked. Excel schedule has formula to seperate interest and principle isnt it. 

Thanks all! I finished it all and made YouTube video and published. Now I'm happy that I understood commission and etc must be into principal amount. Best of luck.

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