CAs Please help -LOST CAR

You will have to check the reilability of admission of claim by insurance company. Please get the latest details from the company.

If the chances of insurance company accepting the claim are less then you will have to book the loss by debiting Profit & Loss A/c. If insurance co. accepts the claim then debit the Ins. Co. a/c and show it in current assets.

Dear,

Normal Treatment:

Debit for Lost Asset is anyway P & L only. The Amount shouls be recognised. And the Loss may be reduced by the amount by which the Insurance Company gives the claim. 

In your Case:

Debit the Lost Car in P & L

You have to collect the details of Claim accepted by the Insurace Company and the credit should be given to the Lost Car in P & L

 Dr.     Insurance Co.      ( with the amount of claim likely to be admissible)

Dr.      P&L A/c                  ( with the inadmissible amount)

Cr.       Car A/c

Lets suppose the gross block of the car was Rs. 100 and acc. dep including depreciation for the year till 20th March was Rs. 70 and you don't expect to recover not more than Rs. 10 from the insurance co, then the scheme of entry would be:-

Acc. Dep.  .......Dr         70

Loss on F/A..... Dr.      20

Insurance Claim Receivable..... Dr. 10

to Fixed Asset.                                                               100