Question
How should fees and commissions earned by banks through
debt renegotiations or rescheduling be recognized?Solution
According to the given information, fees and commissions earned by banks as a result of debt renegotiations or rescheduling should be recognized on an accrual basis over the period of time covered by the renegotiated or rescheduled extension of credit. This means that the fees and commissions should be recognized gradually over the duration of the renegotiation or rescheduling period, reflecting the actual earning of the bank as the process unfolds.
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