Big Bank Limited Provides Good Sport Pty Ltd with a Five-Year

Big Bank Limited provides Good Sport Pty Ltd with a five-year loan to finance the construction of a new sporting stadium. Good Sport had the choice of paying a market rate of interest (7.5% at the inception of the loan) or paying interest at a rate of 1.5% below the market rate, and paying in addition a fixed 'arrangement fee' of $200 000 to compensate Big Bank for charging an interest rate below the fair market value. Good Sport chose the second option.
Big Bank should recognise revenue from the arrangement fee as:

A) fee revenue as services are provided by Big Bank
B) fee revenue on the completion of the significant act of drawing down the loan
C) interest revenue on the completion of the significant act of drawing down the loan
D) interest revenue over the life of the loan in accordance with the effective interest method.