Is finance charges but more specifically costs payable on discounting transactions - on receivables for example the normal situation, i.e. I discount a receivable of €100 to bank and receive €80 - discounting charges on receivables are € 20.

On debts not sure - can only think this relates to fact that recourse always lies with initial holder. Therefore if the debtor defaults, the bank has recourse to the party that discounted the receivable for the capital amount but would also be entitled to further charges that have accrued since the date of discounting.

Typical entries

Example:

Te innen wissels verdisconteren (clientendisconto)
Gegevens :
Een wisselbrief wordt overgedragen aan de bank tegen onmiddellijke betaling van het bedrag verminderd met de discontokosten.
Bedrag van de te innen wissel = 15.625 EUR
Discontokosten = 150 EUR
Netto op onze bankrekening : 15.625 EUR - 150 EUR = 15.475 EUR

Journaalpost bij verdiscontering :
D 55 Kredietinstellingen 15.475
D 653 Discontokosten op vorderingen 150
C 434 Kredietinstellingen - Clientendiscontokrediet 15.625



Journaalpost bij gunstige afloop op de vervaldag van de wisselbrief :
D 434 Kredietinstellingen - Clientendiscontokrediet 15.625
C 401 Te innen wissels 15.625