DEP.ASSETS

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This discussion concerns a machine purchased in May 2017 that was destroyed by fire before installation. The key questions revolve around whether the machine should be considered part of a 'block' for accounting purposes and if an insurance claim can be made under a group policy. The insurer denied the claim, stating the machine wasn't part of a block and production hadn't started, but the user is seeking clarification on how to represent it on the balance sheet as a non-commissioned asset.

Mahendra

Mahendra (Querist)

31 January 2023 Purchase of Machinery 04.05.2017 but not installed at , installation process is running .10.05.2017 fire accured and machine destroy.
QUESTIONS
1) THIS MACHINE IS ADDED TO PART OF BLOCK OR NOT? IF YES IN WHICH SECTION
2) CAN I CLAIM INSURANCE FROM INSURER COMPANY ? BECAUSE GROUP INSURANCE POLICY TAKEN BY COMPANY.
3) INSURANCE COMPANY SAID IS NOT A PART OF BLOCK & NO PRODUCTION IS START SO THIS MACHINE IS NOT PAID ANY INSURANCE AMOUNT

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

31 January 2023 1 Machinery not installed not a part of block.
2 and 3 Check insurance policy.

Mahendra

Mahendra (Querist)

31 January 2023 Thankyou for reply .
If not a part of block ,then how to show in my balance sheet , my point of view they added to block but no depreciation charged.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

31 January 2023 Okay add it in block but will be considered as non commissioned items.

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