Treatment of insurance balances by insurance intermediaries under FRS102
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Service: Sector: Under old UK GAAP, the treatment of insurance balances varied; however, the generally accepted approach to the presentation of insurance debtors, creditors and client or insurers’ monies was to present these items on a gross basis in the financial statements, with the net position, reflecting the unearned commission within insurance debtors, and commission not yet drawn down from the client account.
The generally accepted approach was contrary to the legal relationship between an intermediary, its clients and underwriters which was disclosed within the accounting policies.
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