A successful insurance claim, payment is usually made to the insured. My experience has led me to believe that small businesses do not have a clue, how, to explain the insurance settlement. Most businesses reflect the payment of income.
Not only will deceive but also violates the International Accounting Standards. Because the transaction has everything to do with the assets and nothing to do with income, it should be adjusted against the asset. Accounting for assets that could be detrimental mistake further business in the future, if similar insurance claims made.
Insurance companies settle claims on assets, at book value rather than cost. (And yet these assets are insured at cost at the date of purchase). While these principles may vary from one country to another, the book value is widely accepted as the norm. Since most small businesses fail to maintain proper fixed asset register, insurance companies perform "rating on the table", or making an "estimate", the book value, mostly lower than the "original" book value. Without records, the prosecution can not eliminate prejudice assessment conclusion.
The method used to calculate the insurance claim is a "disposal method". Any assets subject to an insurance claim must be moved to the "Disposal Account". Depreciation of assets for the period is calculated, and credited to the disposal account with the insurance settlement. Cost, less depreciation equal to book value. Any settlement amount above or below book value, will result in loss or gain on disposal.
Insurance claims, one was included as "income", can be adjusted by transferring the amount of waste into account. After the influence of this entry, account balances disposal must be zero. Your new record will reveal, loss or gain on the claim (income statement), the settlement in bank accounts, fixed assets less the stolen / lost asset, and estimates a lower depreciation for the year.
I admit that this is your accountant work, but you have an obligation to provide accurate records. But how many businesses continue to pay the same insurance premium on the asset, since the date of purchase, when they, are entitled to lower premiums, because the value of the assets is lower. (Before any asset losses).
Not only will deceive but also violates the International Accounting Standards. Because the transaction has everything to do with the assets and nothing to do with income, it should be adjusted against the asset. Accounting for assets that could be detrimental mistake further business in the future, if similar insurance claims made.
Insurance companies settle claims on assets, at book value rather than cost. (And yet these assets are insured at cost at the date of purchase). While these principles may vary from one country to another, the book value is widely accepted as the norm. Since most small businesses fail to maintain proper fixed asset register, insurance companies perform "rating on the table", or making an "estimate", the book value, mostly lower than the "original" book value. Without records, the prosecution can not eliminate prejudice assessment conclusion.
The method used to calculate the insurance claim is a "disposal method". Any assets subject to an insurance claim must be moved to the "Disposal Account". Depreciation of assets for the period is calculated, and credited to the disposal account with the insurance settlement. Cost, less depreciation equal to book value. Any settlement amount above or below book value, will result in loss or gain on disposal.
Insurance claims, one was included as "income", can be adjusted by transferring the amount of waste into account. After the influence of this entry, account balances disposal must be zero. Your new record will reveal, loss or gain on the claim (income statement), the settlement in bank accounts, fixed assets less the stolen / lost asset, and estimates a lower depreciation for the year.
I admit that this is your accountant work, but you have an obligation to provide accurate records. But how many businesses continue to pay the same insurance premium on the asset, since the date of purchase, when they, are entitled to lower premiums, because the value of the assets is lower. (Before any asset losses).
