Accounting of general insurance receipts

Accounting treatment :  The hospital equipments must be de-recognized from the balance sheet and a loss must be recognized for the carrying amount of the lost or stolen asset.

Insurance compensation received or receivable on the asset may either be offset against the loss or presented separately as other income.

The accounting entries may therefore be summarized as follows:

Loss on assets a/c...dr (indirect expenses)

Accumalated depreciation a/c....dr

To Hospital equipments (asset) a/c.

Bank a/c......dr

To Insurance claim a/c...(Other income )