Insurance Claims

Code: 1179
👁 Views: 114

Account Information

Financial Statement Statement of Financial Position
Normal Balance Debit

Definition

Claims receivable from insurance companies under insurance policies

Common Journal Entries

Recorded insurance claim

Dr. Insurance Claims
Cr. Insurance Income

Received insurance compensation in cash

Dr. Cash in Hand
Cr. Insurance Claims

Insurance claim rejected

Dr. Insurance Loss Expense
Cr. Insurance Claims

Received insurance compensation via bank

Dr. Bank Account
Cr. Insurance Claims

📐 IFRS vs US GAAP Accounting Treatment

IFRS IAS 37 Provisions, Contingent Liabilities and Assets
US GAAP ASC 450 Contingencies
⚠️ Key Difference Between IFRS and US GAAP

IFRS requires "virtually certain"; GAAP requires "probable" — lower threshold

❓ Frequently Asked Questions

Q: What are insurance claims?

A: Amounts receivable by the company from insurance companies for losses covered by insurance policies.

Q: How is a claim recorded when a loss occurs?

A: Dr. Insurance Claims, Cr. Asset or Expense account depending on the type of loss (e.g., inventory, buildings, expenses).