Treatment of Revolver

Suppose a bank sets up a $50MM revolver with a client and suppose that the client draws $10MM of the facility right away.

  1. What is the accounting treatment of the revolver from the client's perspective?
  2. What is the treatment of the revolver from the bank's perspective? I.e., what is the impact of the revolver on leverage ratios, capital requirements, etc.? Would the revolver be considered on balance sheet? Is it possible to set up an off-balance sheet revolver?
 

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