How to record 12b-1 distribution fees
Accruing the ongoing operational expense paid by a mutual fund for marketing and distribution services.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| 12b-1 Distribution Expense | Expense | 2,500.00 | - |
| Accrued Distribution Fees | Liability | - | 2,500.00 |
💡 Accountant's Note
12b-1 fees are operational expenses taken from fund assets to cover the costs of marketing and selling fund shares.
Practitioner & Systems Framework
💻 ERP Architecture
Calculated as a percentage of average daily net assets in the general ledger.
⚠️ Audit Flags
Expense ratios exceeding the limits stated in the fund's prospectus.
📄 Required Documentation
Distribution agreement and SEC-approved 12b-1 plan.
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