Insurance claim of hydropower during construction period received after commercial operation

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There was a insurance claim for loss by flood during the construction phase of a hydropower company. But the case was pending with the insurance company/ surveyor and the final settlement amount was not agreed/ decided until the commercial operation of the hydropower.

Now, when company started its commercial operation, final settlement amount was agreed with the insurance company and the portion of claim amount was received from the insurance company.

How should the claim received be accounted.?

(Note: Company has already capitalized the additional cost incurred for loss by flood, as the case was pending with the insurance company since long).

Can it be treated as an income?

 

Replies (1)

Usually it is like 

Dr. Debtors/Insurance company a/c

To. Insurance claim a/c

when cash is received

Dr. Bank

Cr. Debtors

The compliance is something I am not aware of ie., if you can amortise the additional repair/damage charges cause you have received your claim. Its some tax law.


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