Import Insurance Policy Accounting when Material received in next FY

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Vipul Acharya (Querist)
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28 May 2021 Dear Sir,

We have taken insurance against import of machinery on 12.03.2021 but machinery in actual received on 12.05.21 (due to ocean transit)

Now, where to book Rs. 10000 /- Insurance Expense in FY 2020-21 or FY 2021-22,

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 May 2021 Open machinery account under transit, book amount payable on foreign vendor and insurance expenses.
The ownership of machinery might have been passed on to you as on 31st March as import terms are on FOB basis.

Vipul Acharya

Vipul Acharya (Querist)
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03 June 2021 Machinery under transit account under Current Asset or under which head and expense to Insurance to capitalied after valuation of machine on the basis of bill of entry please confirm

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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03 June 2021 It's capital goods in transit, as machinery will be capitalised. Include insurance expenses also under capital goods in transit.
Capitalise all expenses including transport, handling, customs duty, clearance charge and commissioning expenses.

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