bank charges recorded as Expense vs Interest

[spideyocd]

In case of bank charges I have read amongst Big 4 summaries

That the customer should account for the amount charged as Interest If the banks would usually usually account for it under IFRS 9

and they should account for it as bank charges/financial charges (non interest) if the banks account for it under IFRS 15

For eg

• Origination fees
  Commitment fees(c)
  Early redemption fees

as Interest
and

• Interchange fees
  Account and transaction fees
  Advisory fees

as bank charges/financial charges

This seems logical but under which IAS and IFRS is such such a comparison required?

or do we do it this way just because it makes sense?

[JRSB]

Guess you'd look at it in the definition of incidental costs when thinking about what goes into amortised cost accounting, if not then bank charges perhaps - keep it simple

[Marek Muc]

interest expense is not defined in IFRS, I would follow JRSB's thinking. If it's part of the amortised cost, it's interest expense. If not, treat it as other charges. However, nothing stops you to recognise those charges as finance costs (interestingly: finance costs are required to be presented separately by IAS 1.82(b), but are not currently defined in IFRS).

[JRSB]

Interesting point!

[spideyocd]

Thanks for the replies!