Sie sind auf Seite 1von 4

2017525 InsuranceClaimNotesCluster

Note Cluste
Home AboutUsNotesCluster ContactUsNotesCluster Disclaimer PrivacyPolicy

Tuesday,28June2016
Contributers

Insurance Claim GouravKumar

Labels:AccountsNotes
PragyaRai

Pages
Insurance mean monetary protection against various kind of future risk.

Home

PrivacyPolicy

Classification of Insurance-: Disclaimer

1. Life Insurance

2. General Insurance -: It covers remaining all type of insurance like Fire,Theft, Mediclaim, Accidental Insurance etc.
AboutUsNotesCluster

ContactUsNotesCluster

Types of Policy -: 1

A.Loss of stock policy/Fire insurance policy.


B.Loss of profit policy/Consequential claim policy.

Loss of stock policy/ fire insurance policy -:

In case of loss of stock due to fire following steps involved for calculation of amount of claim -:
STEP 1 -: Prepare trading account for previous financial year for calculation of GROSS PROFIT RATE; if it is not given -:
Gross Profit Rate = GROSS PROFIT / SALES X 100

(+) (-) Trend in Gross Profit Rate.

STEP 2 -: Memorandum trading account for current year- :


From the beginning of current year to date of fire.

Disclose Gross profit by applying Gross Profit Rate on current year sales.

Determine closing stock as balance figure item from trading account.

Such closing stock is known as stock on date of fire.

STEP 3 -: Calculation of loss of stock -:


Stock on date of fire XXXX
LESS -: Value of salvage stock on date of fire XXXX
Loss of stock XXXX

STEP 4 -: Calculation of Net Amount Of Claim -:


1). If no average clause is applied -:
NET CLAIM = LOSS OF STOCK
NOTE-: In case of under insurance without average clause, claims is restricted to actual loss or sum insured whichever is

less.
2). If average clause is applied -:

Net Claim = Policy Value/ Insurable amount X lossofstock


ToChangerateofprofit:

= Gross Profit rate on cost / 100+Gross Profit rate on cost X 100


Treatment of abnormal stock -:
Part of stock which can not be sold out according to normal gross profit rate than it is known as abnormal stock.
Such stock will be sold below cost or at cost price or more than cost but exatlly not according to gross profit rate.
It is due to poor selling line or damaged stock or any other reason.

Treatment in will be as follows -:

I.Adjust in trading a/c of previous year if gross profit rate is not given.
Convert the stock into actual cost and than disclosed it in trading a/c.
II.Adjust in current year Memorandum trading a/c.
http://www.notescluster.com/2016/06/insuranceclaim.html 1/4
2017525 InsuranceClaimNotesCluster
II.Adjust in current year Memorandum trading a/c.
Disclose detail of normal stock & abnormal stock separately in the tabular format.

Memorandum Trading Account (Begining to Date of Fire)


Particulars Normal Abnormal Particulars Normal Abnormal

To Opening xxxx xxxx By Sales a/c xxxx


stock xxxx ----- By Gross Loss a/c ---- xxxx
To Purchase a/c xxxx ----- By Closing Stock a/c xxxx
To Direct Exp. ( G/P (given (B/F) (given
a/c rate) info.) info.)
To Gross Profit xxxx
a/c
XXXX XXXX XXXX XXXX

Average Clause -:
Situation of Under Insurance.
When stock on date of fire > Policy amount or Insurance Claim.
Policy Value = Insured amount.
Insurable Amount = Stock on date of fire.
Proportionate claim is given out of loss of stock in proportion of insured amount and insurable amount.

Loss of profit policy ( consequential claim policy) -:


Loss of profit after occurrence of fire in the business it will get disturb for certain period because of time required for re-
organization of business.
During such disorganization period business is not able to generate revenue in normal cause
Short sales will results loss of profits.
Policy taken for safe-guard of such loss or profit as known as loss of profit policy

Its covers following plans -:


oClaims for loss of profit.
oClaims for Unavoidable fixed cost.
oclaims for additional exp. incured.

Steps for calculation of claim -:


STEP 1 -: Calculate Gross profit rate if not given -:

Gross profit rate = Net Profit + Insured standing charge/sales X 100

Add or less Increase & Decrease in G.P. Rate

All the date for calculation of GPR will be taken for Previous financial year.
+/- Trend in Gross Profit Rate.
STEP 2 -: Calculation of Short Sales -:

I.Sales in the previous year corresponding indemnity period xxxx

II.+/- Increase or Decrease trend in sales xxxx


III.Expected sales in indemnity period xxxx

IV.Less Actual sales in indemnity period xxxx


Short Sales XXXX

STEP 3 -: Calculation of loss of Profit -:


Loss of profit = Short sales x Gross Profit Rate.

STEP 4 -: Calculation of Admissible Expenses -:


I.Actual additional expenses xxxx
xxxx

II.Gross profit on sales in indemnity period due to additional exp.




III. Additional Exp. G.P. on adjusted turnover X
___________________________________________
G.P on adjusted turnover + uninsured st charge


OR xxxx

Additional Exp X Net profit + Insured Standing
_______________________________
Net Profit + Total Standing

Whichever is less in (i,ii,iii) xxxxx


http://www.notescluster.com/2016/06/insuranceclaim.html 2/4
2017525 InsuranceClaimNotesCluster

STEP 5 -: Calculation of Gross Claim -:


I. Loss of profit xxxx
II. Admissible Expenses xxxx

Less -: Saving in Expenses xxxx


Gross Claim xxxx


STEP 6 -: Calculation of Net Claim -:
A. If Average Clause not applied -:

Net Claim = Gross Claim


B. If Average clause is applied -:
Net Claim = Policy Value/ insurable amount or g.p. on adj. turnover x Gross Claim

NOTE 1 -:
A. Indemnity Period -: From date of fire to re-establishment of business.
B. Annual Turnover -: 12 months sales just preceding date of fire.

C. Adjusted or Standred Turnover -:


Annual Turnover XXXX


+/- Increase & decrease trend in sales XXXX
Adjusted or standred Turnover XXXX
D. Gross Profit on Adjusted Turnover -:

Adjusted Turnover x Gross Profit Rate
it is also known as insurable amount.
E. Standing or Fixed cost -:
Cost which is to be incurred irrespective of amount of sales is known as standing or fixed cost.
Part of the fixed cost which is covered through policy is known as insured standing cost and not covered by
policy as known as uninsured standing cost/charge.
F. Additional Expenses -:
Expenses which is inured for temporary arrangement to run the business during indemnity period, is known as
additional Expenses.
Part of such Expenses which is reimbursable by insurance company is known as admissible expenses.
Unless specifically given entire amount of sales during indemnity period will be assume due to additional
expenses.

NOTE 2 -: Adjusted turnover or standred turnover


Generally standred turnover is trend adjusted amount of annual turnover.
However in the same special cases it is calculated in following manner.

1. If part of annual turnover for current year sales is not separately determinable -:In such case adjusted the entire
amount of annual turnover with increasing or decreasing trend of sales in order to calculation adjusted turnover.
2. If current year sales out of annual turnover is separately determinable -:
In such case adjust with trend only that part of annual turnover which related to previous year and part of annual
turnover which relates to current year will not be trend adjusted because it is already trend adjusted.
NOTE 3 -: Trend in sales -:
1.If already given in question. (Use as it is)
2.If not given in question.
I.If same period sales is available for different year (must be normal period) calculate trend in sales by using sales data for that

period sales of different year.


II.If same period sales is not available than ignore trend in sales.

NOTE 4 -: Average clause will apply only when -:


or Policy value Sum insured < Insurable amount or G.P. on adjusted or
standred turnover

Journal entries for loss of stock by fire -:


When stock destroyed by fire -:
Loss by fire a/c Dr. (with cost of stock destroyed)

To Purchase a/c (with cost of stock destroyed)


Settlement of stock destroyed -:
Insurance company a/c Dr. (for claim lodge against insurance co.)

P&L A/c Dr. (uninsured part out of total loss)


To Loss by fire A/c (Total stock destroyed)

Receiving claim from insurance company -:


Bank A/c Dr.
To Insurance company A/c
Short fall of claim -:
P&L A/c Dr.
To Insurance company A/c
ShareThis:FacebookTwitterGoogle+

PostedbyGouravKumarat06:37:00 +1 Recommend this on Google

NewerPost Home OlderPost

JoinUs Labels

AccountsNotes
http://www.notescluster.com/2016/06/insuranceclaim.html 3/4
2017525 InsuranceClaimNotesCluster
AccountsNotes
LatestUpdate(News)

BlogArchive

2017(1)
2016(11)
ContactUs
October(1)
August(2)
Name July(5)
June(3)

Email* ManagerialRemuneration
InsuranceClaim
IntroductionOfAccounting
Message*

Send

Copyright2016NotesCluster|AllRightsReserved.AndOurSitemapAllLogos,ArticlesandTrademarkBelongsToTheirRespectiveOwnerGouravKumar
WebsiteDeveloped&DesignedbySourabhKumarownerof"AndroRoot"

http://www.notescluster.com/2016/06/insuranceclaim.html 4/4

Das könnte Ihnen auch gefallen