Finance charges are accounts in the income statement and do not appear on the balance sheet. According to the collusion relationship, the data on financial expenses are usually listed in:The "Interest Payable" item in "Current Liabilities" or "Non-Current Liabilities" in the balance sheetFinancial expenses include interest expenses, exchange gains and losses, and handling fees of financial institutions incurred by enterprises in the process of production and operation. These expenses are presented in negative form in the balance sheet to reflect their impact on the financial position.
First of all, interest expense is the main component of financial expenses, which reflects the interest that a business needs to pay as a result of borrowing. In the balance sheet,Interest expense is usually shown under "Interest Payable".and in accordance with the accrual principle. This means that even if some interest has not been actually paid, it still needs to be presented in the financial report to reflect the actual financial burden of the business.
Secondly, exchange gains and losses are financial expenses incurred due to changes in foreign exchange rates. When a company holds assets or liabilities in a foreign currency, changes in exchange rates may cause changes in the value of the assets or liabilities, resulting in exchange gains and losses. These expenses are usually shown in the income statement under "other comprehensive income" or "finance expenses", depending on their nature and accounting treatment.
Finally, the handling fee of financial institutions includes various handling fees that enterprises need to pay in the process of handling financial business, such as transfer fees, remittance fees, etc。These expenses are usually shown in the income statement under "Finance Expenses" and are presented as actual amounts incurred.