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Fees on a standby letter of credit is a current period expense.
Origination fees when a loan is approved do go to increase the basis of the item purchased with the loan proceeds.
The origination fees are usually not booked separately or depreciated separately from the asset
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Great, can you direct me to the authoritative guidance? an auditor referred me to fas91, but everywhere I read that they need to be capitalized.
No, I cannot. I do not have source books.
If there is a GAAP precedent, then I am wrong. It would seem illogical to no expense a standby letter of credit's expense, since the expense is effective whether the loan proceeds are used or not.
It would be difficult to amortize the fees on a SLC since it is a continuing expense, not a fixed cost at a specific point in time.