Insurance Proceeds under US GAAP

[Manhattaner32]

I just wanted to throw out a question I'm researching:

How do you treat insurance proceeds for destroyed assets when the proceeds
exceed the book value of the assets destroyed. Assume that the proceeds
are received in a period preceding the period in which they are replaced?

For example, assets with a book value $50 are destroyed in year 1.
Insurance proceeds of $100 are received in year 1. The assets are replaced
in year 2 for $90.

Do I recognize a gain in year 1 of $50?

or

Do I defer the gain in year one and only recognize $10 gain (excess of
proceeds over replacement value) in year 2?

Any ideas? What is the relevant accounting guidance

 

[Manhattaner32]

Found my answer in FIN 30 "Accounting for Involuntary Conversions of
Nonmonetary Assets to Monetary Assets".:

"....... However, the Board does not believe that an involuntary conversion
of a nonmonetary asset to monetary assets and the subsequent reinvestment of
the monetary assets is equivalent to an exchange transaction between an
enterprise and another entity. In the Board's view, the conversion of a
nonmonetary asset to monetary assets is a monetary transaction, whether the
conversion is voluntary or involuntary, and such a conversion differs from
exchange transactions that involve only nonmonetary assets. To the extent
the cost of a nonmonetary asset differs from the amount of monetary assets
received, the transaction results in the realization of a gain or loss that
should be recognized. Furthermore, the cost of subsequently acquired
nonmonetary assets should be measured by the consideration paid and not be
affected by a previous transaction."