Insurance Claim Process & Accounting Recognition of Lost Assets PDF

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Summary

This is the practical way of insurance claim process and accounting recognition of lost assets and insurance claim thereon....

Description

A. I NSURANCE C LAIM P ROCESS i. In case of loss by fire or other condition (theft, earthquake, flood, etc), engineering department access the item and value of loss and send details of lost item to the account department. ii. Account department after reviewing the details, sent intimation of assets lost to the insurance company showing full details of lost assets (name, model no., serial no., insurance policy no., date of loss, country of origin, etc.) iii.

Insurance company depute the surveyor for finding out the degree of loss and provide the service or technical report.

iv. Procurement department as requested by engineering department make order of goods to replace or repair for the lost assets. v. vi.

Final invoice received after the services or goods received.

All the documents (service report, quotation of parts or services, full quotation of assets, commercial invoice, custom clearance documents, insurance policy copy, claim bill and claim form) shall be submitted to insurance company for the final settlement of the process and for claiming insurance cover of lost assets.

B. THE ACCOUNTING TREATMENT FOR ASSETS LOST AND INSURANCE CLAIM RECEIVED.

I. Repair of Insured Lost Asset 1 At the time of loss Impairment Dr. Amount of Repair Asset Cr. Amount of Repair (Being repair of asset and cost of impaired asset is not identifiable; impairment of the same has been booked at repair cost.) 2 At the time of Repair R&M Dr. Amount of Repair Vendor/Bank Cr. (Being repair of asset has been made)

Amount of Repair

3 At the time of Claim Received Bank/Insurance Co. Dr. Claim received Amt Impairment Cr. (Being claim amount received from Insurance Co.)

Same F.Y.

4 At the time of Claim Received

Different F.Y.

Claim received Amt

Bank/Insurance Co. Dr. Claim received Amt Other Income Cr. (Being claim amount received from Insurance Co.)

Claim received Amt

II. Replacement of Insured Lost Asset 1 At the time of loss Accumulated Dep. Dr. Till now Dep. Impairment Dr. Balance Figure Assets Cr. Total Cost of Asset (Being asset impaired and DE recognition of asset has been made) 2 At the time of Replacement Asset Dr. Amount of Replacement Vendor/Bank Cr. (Being replacement/addition of asset has been made) At the time of Claim 3 Received Bank/Insurance Co. Dr. Claim received Amt Impairment Cr. (Being claim amount received from Insurance Co.) At the time of Claim 4 Received Bank/Insurance Co. Dr. Claim received Amt Other Income Cr. (Being claim amount received from Insurance Co.)

Amount of Replacement

Same F.Y.

Claim received Amt

Different F.Y.

Claim received Amt

III.Refurbishment of Insured Lost Asset 1 At the time of loss Impairment Dr. Amount of Refurbishment Assets Cr. Amount of Refurbishment (Being major refurbishment of asset and cost of impaired asset is not identifiable; impairment of the same has been booked at repair cost.) 2 At the time of Repair Asset Dr. Amount of Refurbishment Vendor/Bank Cr. (Being refurbishment of asset has been made)

Amount of Refurbishment

At the time of Claim 3 Received Bank/Insurance Co. Dr. Claim received Amt Impairment Cr. (Being claim amount received from Insurance Co.) At the time of Claim 4 Received Bank/Insurance Co. Dr. Claim received Amt Other Income Cr. (Being claim amount received from Insurance Co.)

Same F.Y.

Claim received Amt

Different F.Y.

Claim received Amt...