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Discussion > Accounts > A/c entries >

Accounting Treatment - Loss of fixed Asset by fire

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Seior Financial Analyst

[ Scorecard : 67]
Posted On 25 March 2010 at 19:11 Report Abuse

Hi would kindly request someone to detail me the accounting treatment for loss of substantial part or full fixed asset by fire.?

Also kindly let me know the treatment if insurance is claimed not yet received.

is such insurance claim a contingent Asset?

 

Thanks and regards


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SACHIN KUMAR GARG
Final Student

[ Scorecard : 105]
Posted On 27 March 2010 at 15:44

Loss by fire A/c Dr

To Fixed assets A/c

 

and

Insurance co A/c Dr. (with amount of claim accepted)

To Loss By fire

 

And balance figure of Loss by fire A/c tran. to P&L A/c





Member (Account Deleted)

[ Scorecard : 598]
Posted On 29 March 2010 at 21:16

suppose ur Fixed asset is wirth RS. 5000 &  u get d claim of RS. 2000

then A/C entry wud b :

Bank/Insurance claim receivable Dr 2000

Loss by fire Dr                                        3000

             To Asset A/c                                            5000



Total thanks : 1 times



SIDHARTH DHIR
senior articled assistant

[ Scorecard : 623]
Posted On 30 March 2010 at 23:12

AGREE WITH MANAVSI




Payal Gupta
article assistant

[ Scorecard : 176]
Posted On 31 March 2010 at 17:31

yes agree with manavsi




SACHIN KUMAR GARG
Final Student

[ Scorecard : 105]
Posted On 05 April 2010 at 13:10

i m not agree with Manavsi, coz date of loss and date of claim can't be same (varification from insurance company take 2-3 days)




Payal Gupta
article assistant

[ Scorecard : 176]
Posted On 05 April 2010 at 16:28

insurance claim is not contingent asset




SACHIN KUMAR GARG
Final Student

[ Scorecard : 105]
Posted On 05 April 2010 at 16:39

Hi Payal

i never say it's contingent.

i m saying only that generally date to loss and date of accept the claim by insurance company is differ that's why entry is done at two different pt. of time




madan pal singh
student

[ Scorecard : 35]
Posted On 10 August 2011 at 19:18

What if Claim recieved is more than the value of Depreciable Asset?

For Example: Book Value of Asset in the books of the company Rs. 40000.00; Claim Recieved Rs. 55000.00 and WDV as per Income tax Act Rs. 35000.00. What will be the entry in the books and treatment for income Tax Purpose?

 




madan pal singh
student

[ Scorecard : 35]
Posted On 10 August 2011 at 19:21

and we have been providing for Deffered Tax liability for the Diffrence in WDV as per Income Tax Act and WDV as per Companies Act. Shoud the Deffered tax Liability provided for in Previous Years  be Reversed?



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