Accounting entry

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VANYA GARG (Querist)
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23 January 2012 SIR,
plz tell me a/c treatment in the following situation:
a car had dameged in an accident. repair charges rs. 110000.00 paid vide NEFT.
Insurance claim of rs 100000.00 is still to be received

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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23 January 2012 Dr: Repair charges Rs.10000
Dr:Insurance claim receivable Rs.100000
Cr:Bank a/c Rs.110000

VANYA GARG

VANYA GARG (Querist)
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25 January 2012 sir,
is this repair is not to be considered as increment in the value of car?
As after the repair many parts had been changed that has incresed the life of car.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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26 January 2012 Criteria of considering the expenses as fixed asset is , based on the expenses you need to get benefit or working condition of the fixed asset will be increase from the existing condition. but this is normal accident charges will not form the capital expenses

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