Prepaid bank processing fees

We are availing a credit facility (OD Account) against properties. The tenure of credit facilities is for 14 years. Our banker debited the amount of Rs.7,10,000/- as one time processing fees at the time of sanctioning our OD limit.  As per commitment of our banker no processing fees will be levied for next 14 years against our OD account, hence we have booked our expenses as prepaid exp on year wise proportionate ratio, now our auditor are having different view on this and they are stating that it is one time cost, though the same will not be applied during remaining tenure. Please give your opinion on the above said issue.

Replies (1)

YES IT SHOULD BE DEBITED P&L BY 710000 BECAUSE IT IS ONE TIME FEES 

IF IT IS PROUVED THAT IS FOR 14 YEAR BUT CHARGE IN LUMSUM THAN IT IS PREPAID EXP.

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