in my client case(Firm) car was stolen and insurance claim of Rs.100000/- was received from insurance company . what is accounting treatment. according to me this should not be credited to profit and loss account b,coz due to this tax liability will increase and on the other hand it is cash receipt . i want to reduce block as per I.T. act at which amount i should reduce my block. my accountant friend has found out its WDV of Rs.68000 and against that Rs.100000/- was received kindly suggest accounting treatment. My view is that not to give effect in profit and loss account , directly reduce or give credit to motor car account amount received from insurance company.
CAclubindia
