Where should dr's and cr's sit?
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Hi
Heres a problem which I hope some of you could advise on.....
I work for an insurance company (lets call it ABC). We have a subsidary company (called xyz) who write business on our behalf, so Xyz is not the insurer, ABC is.
Xyz have bank accounts (all in the name of Xyz) where the insured and brokers pay the insurance premium to.
ABC, being the actual insurance company, account for the premium on their P&L. This is done by transfer via the intercompany account.
Where should the debtors and creditors sit iro the monies due from brokers? Ie on Xyz's balance sheet, or ABC's balance sheet?
Xyz are responsible for collecting cash from brokers etc. However Abc are ultimately responsible for any debt if Xyz run out of cash, but if the brokers pay the insurance premium to a bank account in xyz's name, should the dr's not sit on xyz's balance sheet?
Hope this is sufficient info for some help. Any advice is welcome!
Thanks
Heres a problem which I hope some of you could advise on.....
I work for an insurance company (lets call it ABC). We have a subsidary company (called xyz) who write business on our behalf, so Xyz is not the insurer, ABC is.
Xyz have bank accounts (all in the name of Xyz) where the insured and brokers pay the insurance premium to.
ABC, being the actual insurance company, account for the premium on their P&L. This is done by transfer via the intercompany account.
Where should the debtors and creditors sit iro the monies due from brokers? Ie on Xyz's balance sheet, or ABC's balance sheet?
Xyz are responsible for collecting cash from brokers etc. However Abc are ultimately responsible for any debt if Xyz run out of cash, but if the brokers pay the insurance premium to a bank account in xyz's name, should the dr's not sit on xyz's balance sheet?
Hope this is sufficient info for some help. Any advice is welcome!
Thanks
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Comments
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Re:Where should dr's and cr's sit?
Hi
The debtor would sit on XYZ and they would also have an intercompany creditor to ABC.
ABC's would show XYZ as a debtor.
That's what I would say anyway!
ABC will be responsible for XYZ debts as it sounds as though they are the ultimate parent holding company.0 -
Re:Where should dr's and cr's sit?
Thanks - thats what I think too.
Any more thoughts anyone?0