Dealer Commission — Subscriber Acquisition
Paying a retailer or dealer a commission for activating a new postpaid subscriber.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Subscriber Acquisition Cost (Expense) | Expense (+) | 35.00 | - |
| Commissions Payable (Dealer) | Liability (+) | - | 35.00 |
💡 Accountant's Note
Dealer commissions are a major component of subscriber acquisition cost (SAC). They may be expensed immediately or capitalized as contract costs under IFRS 15 if incremental and recoverable.
Practitioner & Systems Framework
💻 ERP Architecture
Dealer commissions are calculated by the dealer management system (DMS) based on activations reported by each dealer. The commission is validated against the activation records in the CBS before payment. Commissions are posted to the AP sub-ledger and expensed to the SAC account. Where IFRS 15 capitalisation applies (see tel-cac-capitalized-contract), the commission is initially deferred. The dealer management system tracks commissions payable by dealer, plan type, and activation month. Monthly reconciliations between the DMS and CBS prevent over-payment for invalid activations.
⚠️ Audit Flags
Auditors test dealer commission calculations against the signed dealer agreement (rate per activation by plan type). Confirm that commissions are only paid for valid activations — test a sample of commissions against CBS activation records. Review clawback provisions — if a subscriber churns within a specified period, the dealer's commission is recovered. Test that clawback receivables are raised promptly. Assess the accounting treatment (expense vs. capitalise) and confirm it is applied consistently.
📄 Required Documentation
Dealer commission agreement (rates per plan type), DMS activation and commission report, CBS activation cross-reference, AP payment records, clawback receivable register, IFRS 15 capitalisation assessment for incremental costs, and dealer audit reconciliation.
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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.