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Insurance Revenue Recognition

"I work for an insurance brokerage; the vast majority of the "delivery" is the initial placement or renewal of a 1 year policy term; there is a minority (generally) of the delivery that is due to ongoing servicing over that 1 year. How would you view this from perspective of meeting the performance obligation?"

This question was asked at this Proformative Webinar: "The New World of Revenue Recognition: Industry Impacts and Transition Options"

What's your take on it?


Jeff Tchir
Title: Founder and Technical Advisor, RevRec.NE..
Company: RevRec.NET
LinkedIn Profile
(Founder and Technical Advisor, RevRec.NET, RevRec.NET) |

If by "ongoing servicing" you mean things like claims processing or risk consulting, these will have to be identified as separate performance obligations. Perhaps previously thought of as incidental, a certain portion of your commission may have to be allocated to these other obligations and then recognized once the the obligation has been fulfilled (which is likely throughout the term and not up front).


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