Loss of Assets from Fire at factory

Never Give up... (student) (54 Points)

19 May 2024  


I have a query regarding loss of assets from fire at factory. 

Fire incident occurred causing loss of Furnace in a factory and it is almost full loss.
Insurance claim received is lesser than WDV value.
how to book insurance receipts and loss of assets in book.

For Eg:
Assets Gross Value- INR 10,00,000
Accumulated Dep-INR 3,00,000
WDV-INR 7,00,000
Insurance claim received- 200,000

Should  entry be like  following :


   DR   CR 
Insurance Receivable  ₹200,000.00  
Acc Dep A/c  ₹300,000.00  
Loss of Assets from Fire  ₹500,000.00  
Assets    ₹1,000,000.00

2nd- How loss of Assets from Fire will be shown in PNL? As extraordinary Item?


Please guide me.

Thanks in Advance