Hi We had a fire in our plant which resulted in insurance claim for Property damage and Business interruption. For simplicity, Let me put some numbers; Damage to property, corrected by spending on repairs - $500K Business Interruption claim - $400K Total insurance claim $900K Insurance claim received $150K (deductible $750K) We have accounted for repairs of $500K as a part of repair cost. How do I account for receipt of insurance claim of $150K. Krishna
accounting for receipt of insurance claim
Basically you send it all to Other Income / Expense, as it is non-operating. Lumping it all together helps to clarify the impact.
E&Y has a nice publication here:
So, for the claim it is
CR Other I/E