Accounting for Insurance Assets

[blackstone]

We have assets that are from an insurance claim which we received insurance money. How would we account for the assets? Depreciate and the insurance money is revenue? Or the insurance money is off set to the assets? Thanks

 

[Humphrey]

nsurance is a necessity in any business. Businesses cover themselves against losses such as fire, theft and unexpected natural disasters. It is with the bookkeeping or accounting that owners get it wrong.

On successful insurance claims, a payment is normally made to the insured. My experience has led me to believe that small businesses have no clue, as to how, to account for insurance settlements. Most businesses reflect the payment as income.by (Accounting Author)