Insurance payout
Dottie
Registered Posts: 99 Regular contributor ⭐
Hi
How do I show an insurance payout in the accounts? A client received a payout last year for flood damage to stock and equipment?
Many thanks in advance!
Dottie
How do I show an insurance payout in the accounts? A client received a payout last year for flood damage to stock and equipment?
Many thanks in advance!
Dottie
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Comments
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In P&L as 'Other Income' after operating profit?0
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I wouldn't.
I may be controversial here but what I do is net it off the expense code. If it is used to pay for stock I credit the purchases account. Otherwise the stock is there originally and then the replacement stock is there again - effectively double counting.
For the equipment I would credit the equipment account and then add the new equipment.0 -
Slightly different for me too!
I would treat the payout in relation to assets as proceeds of sale and create a fixed asset disposals account as normal.0 -
Sorry Dave, that is really what I would do as well, just didn't want to get into the realms of balancing allowances and disposal accounts. Glad you agree with other treatment!
Wasn't very clear about what I meant really ;-)0 -
Thanks. I had thought part of it should be shown as disposal proceeds re the fixed assets.
Much appreciated!
Dottie0 -
I would enter as a sale to the insurance company!0
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Why?0
