Hello, Can you book future WC loss funds refund in the current year? We are self insured, usually our workers comp loss funds are paid upfront and at end of each FY, we either pay additional losses or get a refund. This year our loss was signiftley less then amount paid by $400k. Our carrier offered to refund us 30% $120k this year and apply the rest to future policy, plus reduce LF premiums of new policy. Can we account for the remaining $280K refund in this fiscal year? As a reduction in our liability or book it as an asset ( AR other or Prepaid INS) Thanks
How to Account for future WCLF refunds
Answers
You are on the right track (AR Other or Prepaid Ins).
(1) be sure that your carrier has committed and communicated (documentary support) on the future application of the funds.
(2) be sure that you are reducing the related expense as the other side of the entry.
(3) be consistent with the treatment going forward
1
Thank you. I was not sure if the remaining refunds could be booked currently. But it's verifiable