How do you record money from an insurance claim involving property?
I would use a separate general ledger account such as Loss from Property Damage to record all costs incurred to get the property back to its previous condition. The costs incurred will be debited to Loss from Property Damage. The amount received from your insurance claim would be credited to the same account. Other money received, such as the salvaging of materials, would also be credited to Loss from Property Damage.
If the account Loss from Property Damage ends up with a debit balance, that will be the amount of the loss. If the account has a credit balance, there is actually a gain on the property damage.
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I am interested in learning accounts as a beginner, can I manage? I have no idea as to what accounting is but I am picking interest in this subject for busness purpose.
How do we record a payment rec’d on an insurance claim of property building damage?
Do we sent up an expense account on the iinsurance claim amount ?
Then apply the amount recieved?
thank you Liz
please reply to my comment above thank you Liz