How to book MGA underwriting commission
Recognizing commission income earned by a Managing General Agent (MGA) for underwriting services.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Commission Receivable | Asset | 1,500.00 | - |
| Commission Income | Revenue | - | 1,500.00 |
💡 Accountant's Note
MGA earns commission upon the inception of the policy or as agreed in the binder agreement with the carrier.
Practitioner & Systems Framework
💻 ERP Architecture
Automated revenue recognition modules should trigger this entry based on policy effective dates in the underwriting system.
⚠️ Audit Flags
Revenue recognition prior to policy inception; unusual commission structures.
📄 Required Documentation
Binder agreement, bordereau report, and policy inception notification.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.
Related Journal Entries
Insurance Broking & MGA
Insurance Commission — Recognized at Policy Inception/Renewal (Point-in-Time)
Insurance Broking & MGA
Contingent Commission / Profit Sharing — Variable Consideration Constrained Until Carrier Determination
Insurance Broking & MGA
Premium Trust Account — Client Premium Received (Not Broker Revenue — Fiduciary Obligation)
Discussion & Community Questions
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