If a motor vehicle of a company with cost of 2,000,000 Naira (Nigerian currency) and accumulated depreciation of 800,000 had an accident insurance claim of 1,500,000 for the lost motor vehicle, what will be the accounting entry? What would the journal entries be? The flood damage only required drying equipment and replacement of carpeting to restore the affected parts of the first floor back to their original condition. If this is not the case, the claim is not recognized and will not be reported in the balance sheet. Taking these steps will help ensure that the proper recording of insurance claims is done quickly and efficiently. We and our partners use cookies to Store and/or access information on a device. Insurance proceeds to settle a provision are accounted for as reimbursements under IAS 37 Provisions, Contingent Liabilities and Contingent Assets and are recognised as a separate asset (with related income) when recovery is virtually certain. Lastly, when recording the journal entry for an insurance claim received, businesses must also be aware of any prepaid insurance expense that should be recorded in order to accurately reflect the total amount of money received from the insurer. how to made entry for part service amount paid by customers another part amount paid by insurance company, But what do we do under periodic inventory system? The owner received a check from the insurance company. The determination of whether to recognize a loss is made without regard to any expected recoveries from insurance. Your individual vehicle insurance may not cover your business use of your personal vehicle. The Small Business Administration, USA has more information on Business Insurance. Now, we need to reduce the loss as theres a insurance receipt. To determine this, companies need to consider the nature and timing of the insured event. The building suffered water damage. 660. Accounting for Inventory Purchase, Journal Entries, Payment in Kind Bonds: Types, Significance. (d) Goods loss by fire Rs 50,000 and insurance company accepted full claim. After a month, insurance company allows $5,000. The following tracks the accounting entries resulting from claims for accident month January 2006 for a Best Practices for Conducting Audit Procedures for Sales Revenue, Best Practices for Conducting Audit Procedures for Short-term Investments, Best Practices for Conducting Audit Procedures for Share-Based Payments. Something to keep in mind is if these two entries are in different months. This loss is deducted from purchase of goods and debited in profit and loss account. 8000. Your roof was probably leaking so you fixed it fast. This is a type of accounting entry that accounts for the loss in value of the destroyed assets. For the damage:DR CRDamage/Exp Asset/Bldg, For the Insurance CheckDR CRCash Damage/Exp, When we pay for the repairs:DR CRAsset/Bldg Cash. Usually you report it as a gain in the same category you . Record insurance proceeds . What GL account should this reimbursement go into so that it is not considered income? Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. The consent submitted will only be used for data processing originating from this website. A loss and a gain may be shown in separate years depending on timing of the involuntary conversion and when insurance claims are considered fixed and determinable, or received. This is due to we receive the cash of $8,000 from the insurance company to cover 80% of our loss of goods. [IAS 16.6566, Insights 3.12.195.15 and 198.10], References to Insights mean our publication Insights into IFRS. Is the below journal right? An insurance claim is the difference between the cash recovered and the amount of inventory lost, which is known as the uncovered amount. A journal entry for insurance payments is the process of recording the proceeds of an insurance claim. A gain would be recognized in the subsequent year if the insurance proceeds for the roof replacement claim were then approved and received. The insurance payment will be a part of the businesss profit and loss. TS Traders has following extracted transactions: (b) Goods loss by fire Rs 35,000 but insurance company accepted claim only Rs 15,000. Set your threshold at what works best for your organization. Copyright 2009-2021 Michael Celender. These journal entries (see examples below) cover the transactions associated with the fixed-asset lifecycle: . On the Class section, choose the class the insurance claim will be linked. How shall the insurance compensation in respect of the lost or stolen asset be accounted for? The insurance company paid you $20,000 for your loss. The cookies is used to store the user consent for the cookies in the category "Necessary". Journal Entry for Outstanding Expenses 8. The best idea is to have a written asset capitalization policy that states your company standards. If the insurance provider pays personal insurance proceeds (like life insurance due to the death of an insured loved one) into your business bank account (because thats the account you gave them or because thats where you deposited the check as a sole proprietor), then the journal entry in the business bookkeeping records will be: Debit:Cash/Bank(asset account) Credit: Capital(equity account). The business can recognize the same if there is certainty and measurability regarding the revenue. By following the steps outlined above, businesses can ensure that their accounting records accurately reflect their insurance transactions. Its usual business practice to record a receivable or liability for any transaction. How do you record this? The journal entry would be as follows: Cash a/c dr 2500. Lost profits, by themselves, do not give rise to a provision. Here is an article by valuesdrivenresults.com which explains it. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. The purpose of the expense and the insurance claim are two different types of business transactions. A journal entry for insurance payments is the process of recording the proceeds of an insurance claim. This is the amount that was paid prior to the claim being submitted and can be used as a deduction against any potential profits. If the company is injured or has its assets destroyed, an insurance claim can be received. It is acceptable to put money received into an expense account when it makes sense to do so, as it does in this instance. What is the journal entry for receiving the compensation? I cannot credit inventory as I will just record closing balance in P&L. Here, happening of event meaning depends on policy. XYZ company lost its furniture due to a fire accident in its office building. A business that owns motor vehicles will require insurance cover on those. KPMG refers to the global organization or to one or more of the member firms of KPMG International Limited (KPMG International), each of which is a separate legal entity. Recognise a receivable only when there is an unconditional right to receive the compensation for business interruption. So, we choose to nullify the loss by increasing income portion. We cant recognize the future Gains in advance owing to conservative accounting conventions or the doctrine of prudence. 2023Copyright owned by one or more of the KPMG International entities. The following extracted information is available: Goods worth Rs 50,000 were destroyed by fire. Natural disasters like storms, floods, and fires can have a significant impact on tangible property. All Rights Reserved. With the right bookkeeping software, the bookkeeper can open sub-accounts under the Motor Vehicle expense account like this: Motor Vehicle Expenses (Main expense account) Gas/Fuel Vehicle Insurance Vehicle Repairs & Maintenance. Companies that have already adopted ASC 606, Revenue from Contracts with Customers will find the same guidance in ASC 610-30, Revenue Recognition Other Income Gains and Losses on Involuntary Conversions. The process is split into three stages as follows: Write off the damaged inventory to the impairment of inventory account. We recommend organizations affected by natural disasters consult with their accounting advisors to ensure accurate accounting and financial statement disclosures. In this case, it will appear on the assets side of the Balance Sheet. Bad debts (not recovered) is loss and nominal a/c so debited. Individual vehicle insurance is not a deductible business expense so the insurance journal entry for individual vehicle insurance, if paid out of the business bank account is: Debit: Drawings(equityaccount) Credit: Cash/Bank (asset account). For repairs to motor vehicles the insurance journal entry for proceeds will be similar: Debit:Cash/Bank(asset account) Credit: Motor vehicle repairs or vehicle insurance(expense account). By following this process, businesses can easily record their transactions when dealing with claims received from insurers. By clicking Accept All, you consent to the use of ALL the cookies. As an example, let's say you lease a building and valuesdrivenresults.com the roof was damaged in a storm. The accounting for insurance proceeds related to losses triggered by an external event depends on the nature and timing of the insured event. Insurance compensation received or receivable on the asset may either be offset against the loss or presented separately as other income. The same goes for the other accounts. Accountingcoach.com has a good example of accounting for payroll withholdings for health insurance. Is the insurance claim received an income? It caused the lift in the building to broken. It protects against financial loss resulting from errors or negligence. The amount can be validated with a receipt. Sometimes, the insurance claim takes time to revert back regarding the admission of the claim. Let's take three examples. These cookies will be stored in your browser only with your consent. Determining how to accurately account for the various pieces may require additional assistance. This depends on the exact asset/s that were destroyed in the fire and to what extent they were covered. Wind glass of office vehicle was broken by stone during riot. The business paid to have the damage repaired and later the employee reimbursed the business with a check from her insurance company. The ability to claim these proceeds will depend on the specific terms of the insurance contract, actions taken by the government and interpretation of the applicable law. So, there shall be certainty regarding the receipt before recording a receivable asset. When a business puts in an insurance claim to their provider for damages, the provider will pay money to help them cover the costs of repairing or replacing what was damaged (this is just one example). The treatment of loss varies slightly according to the nature of the asset as explained below. When payment is made, either in full or with monthly payments, the bill will decrease, which means the accounts payable account will decrease. I debit insurance claim receivable, which account do I credit???? Loss on insurance proceeds ($3,000) is deducted from Cash-Fire Damage Reimbursement ($7,000) and inventory ($10,000) is credited ($7,000) in the event of a fire that damages $10,000 in inventory. An insurance claim will be of a capital nature. It is important to remember to include any applicable taxes or other expenses associated with the claim when making this entry. for business interruption or third party claims, including penalties for non-performance, late delivery or cancellations as a result of a natural disaster, a geopolitical event or a pandemic. The following figures and estimates were provided by management: Assuming the insurance proceeds were received before year-end, the following entries would be recorded and the following net casualty loss would be recognized: Record insurance proceeds related to flood claim, Record insurance proceeds related to roof claim. For the purpose of accounting of lost or stolen assets, the accounting treatment may be classified into the following categories: In all instances, the lost or stolen asset must be de-recognized from the balance sheet as no future economic benefits from the asset can be realized or controlled by the entity. In other words, the insured property has been damaged or destroyed. If you need to draw that money (or some of the money) out of the business for personal use, the journal entry will be: Debit: Drawings(asset account) Credit: Cash/Bank(asset account). After one month, insurance sent the cheque of Rs. With this guide, youll learn the steps to record a journal entry for an insurance claim received so that you can keep your books straight. Home > Inventory > Accounting for Insurance Proceeds. On the balance sheet as of March 31, 20X1, Insurance Company would have cash or investments of $400, premium receivable of $1,200 and unearned premium liability of $1,200 related to this policy (ignoring any claim activity). Meanwhile, the credit portion of the entry would show an amount equal to that of the insurance claim being received and would be recorded in whatever appropriate account was determined earlier (e.g., Inventory). Per Nominal Account golden accounting rules, we must credit all incomes and gains. Its important to keep accurate records of all insurance claims and their related expenses in order to stay compliant with all applicable laws and regulations. [Insights 3.12.198.10], Assess whether any business interruption triggers. On 01 June 202X, the company makes a payment of $ 120,000 for the insurance service that will cover 12 months (June 202X-May 202X+1). There isn't any new approach to follow. This could be done by recording an income or revenue account for the net amount of money received after subtracting any deductible expenses or other fees associated with the claim. When your business suffers from theft, flood or fire, you lose money. The plan is for us to receive the monies and THEN pay our kitchen fitter once the new kitchen is purchased and fitted. Goods of Rs 36,000 lost by theft but the company refused the claim due to suspicious circumstance. That question can be tricky. Not all insurance payments (premiums) are deductible* business expenses. Please prepare the journal entry for the insurance premium paid. Accounting insurance claim received on machinery destroyed by fire journal entry, journal entry for goods destroyed by fire and insurance claim, journal entry for insurance claim, journal entry for insurance claim received, journal entry for loss by fire and insurance claim. This annual fee can be paid with a one-off payment or it can be spread over 12 monthly payments, or sometimes fortnightly. You can help me by sharing this article at your social media platform. The recommendation is to group this insurance with the other motor vehicle expenses (fuel, r&m) in the bookkeeping accounting records. The loss on theft of cash and any other assets may be simply be expensed to the income statement net of any insurance claim received or receivable. Just following the golden rules of accounting, we need to create an insurance asset and then we will nullify it on receipt of funds. The cash account should be used to record expenses related to an insurance. The proceeds are usually placed into the same account as the original payments for repair. There can be a time gap between approval of the claim and receipt of the amount. 47160- Purchases from 1.04.09 to 1.8.09 rs.38460- Sales from 1.04.09 to 1.8.09 rs.42360In valuing the stock as on 31.3.09, goods to the value of rs. The insurance claim will be recorded as a class tracking entry. Learning how to properly record a journal entry for an insurance claim can save time and money down the road by preventing costly errors and providing valuable insight into your finances. A company would have an unconditional contractual right to receive compensation if: The compensation receivable would be measured based on the amount and timing of the expected cash flows discounted at the rate that reflects the credit risk of the insurer. bbellur@deloitte.com. Credit. If the amount of loss is material, it may be necessary to present the loss separately in the income statement.if(typeof ez_ad_units!='undefined'){ez_ad_units.push([[300,250],'accounting_simplified_com-box-4','ezslot_3',128,'0','0'])};__ez_fad_position('div-gpt-ad-accounting_simplified_com-box-4-0'); Accounting treatment for lost or stolen tangible fixed assets such as motor vehicles is similar to theaccounting for disposalof such assets without any sale proceeds.if(typeof ez_ad_units!='undefined'){ez_ad_units.push([[580,400],'accounting_simplified_com-medrectangle-4','ezslot_7',123,'0','0'])};__ez_fad_position('div-gpt-ad-accounting_simplified_com-medrectangle-4-0'); The fixed asset must be de-recognized from the statement of financial position and a loss must be recognized for the carrying amount of the lost or stolen asset. For example, if the claim is for damage or loss of inventory, then the Inventory account would generally be credited with the amount of the insurance proceeds. Accounting treatment for lost or stolen assets depends on the nature of assets. The insurance Claim received is an income if the second accounting treatment (affecting the Statement of Profit and loss) is followed. The accounting for insurance proceeds is a complex process that requires careful consideration and recording of the appropriate journal entries. If goods are insured, insurance company accepts this loss. The amount of inventory de-recognized must include all elements of cost which are ordinarily included in the valuation of inventory and should not just consist of the purchase cost of direct materials (e.g. Now assume the insurance proceeds for only the flood damage were received before year-end, and the insurance proceeds for the roof replacement were not yet fixed and determinable as of year-end. The cookie is used to store the user consent for the cookies in the category "Other. Some insurances may be compulsory like Workers Compensation, Commercial Auto and Professional Liability. Entry on the receipt of insurance proceeds is. All Rights Reserved. Plus, there are questions I received from real bookkeepers/business owners who needed to know how to enter their insurance proceeds from property damage to which you can read my answers. Q: What is the journal entry for the claim recovered from fire insurance? Just following the golden rules of accounting, we need to create an insurance asset and then we will nullify it on receipt of funds. For Posting a Comment You must be Logged In. When the claim is agreed, set up an accounts receivable due from the insurance company. Knowing how to record a journal entry for an insurance claim not only helps ensure that your books remain accurate and up-to-date, but it also helps you understand the financial impact of having insurance coverage. Joint Life Policy Reserve Method There was insurance regarding this. Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors. 2023 Baker Tilly US, LLP. In this case, the repair is likely over your de minimis threshold. Example of Recording Insurance Claim for Inventory Loss Assume that a company received $105,000 from its insurance company as a settlement for the inventory lost in a fire. Full Reimbursement on an Insurance Claim. You can see from the above insurance journal entry that the proceeds have been placed into an expense account; this is because it puts the check back into the same account that the original repair payments were made from. Which type of account is insurance claim account? An asset of Mr. X's was destroyed by fire on 1.08.09. the following particulars are ascertained from the book and records:- Stock at count as on 31.3.08 rs.18948- Stock at cost on 31.3.09 rs. In this case, we can make the journal entry for the $10,000 goods lost by fire with the 80% insurance claimed received as below: In this journal entry, we only charge $2,000 as an expense to the income statement. For example, if all restaurants are ordered to close by the government, then they may be able to claim under their insurance contracts. Rather, they are the proceeds from an insurance claim. The profit and loss account is the best place for an insurance claim. Companies often have questions about how to account for the effects of property damage caused by natural disasters under U.S. generally accepted accounting principles (GAAP). Is bookkeeping hard? How Much Auto Insurance Do Lenders Require? A storm caused minor flood damage to the first floor of a building as well as major damage to the roof. Financial statement disclosure requirements are addressed based on the nature of the material financial item being disclosed (e.g., asset impairments or casualty loss). Hope this article provides good insights on insurance claim entry. First and foremost, the company must recognize the claim as an asset in its general ledger. Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. Thanks. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. 1110 was written off as damaged. A subsequent event disclosure may be required when a natural disaster occurs after year-end and the company has not yet issued their financial statements. Baker Tilly US, LLP, trading as Baker Tilly, is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. The annual payment is usually cheaper than the total of the monthly payments as an incentive to pay the bill up-front, but small businesses often cant afford this, so the providers offer the monthly option. Please help. Can you please tell me what should be the journal entry for Workers Compensation Claim Received? In other words, it's the money that you would shell out of your own pocket before receiving insurance coverage. Return to Ask a Question About This Lesson!. This cookie is set by GDPR Cookie Consent plugin. The process of recording a journal entry for an insurance claim is relatively simple. The cookie is used to store the user consent for the cookies in the category "Performance". A lower standard increases workload on your accounting staff, but maximizes income. Insurance deductible pertains to the amount of money on an insurance claim that you would pay before the coverage kicks in and the insurer pays. All the lessons on this site and much, much moreAvailable Now On. Sometimes, insurance company does not accept claim if there is suspicious circumstance. Not only does this help businesses keep accurate records of their financial dealings but also helps them track any changes or discrepancies that might arise over time. The amount of the disposal and loss, and where they are reported on the financial statements, are also required. It is important to remember to include any applicable taxes or other expenses associated with the claim when making this entry. If you want to know how to account for insurance proceeds on assets that you lease, keep reading. I recommend checking with your clients tax accountant because of the complexities around high value assets and costly damages. These gains may not be recognized until all contingencies related to the insurance claim are resolved. This journal would be used if your business has paid or will be paying a contractor to repair something. The exact asset/s that were destroyed in the balance sheet cash of $ 8,000 the! To an insurance claim user consent for the loss in value of the asset may either be against... By valuesdrivenresults.com which explains it prepare the journal entry for Workers compensation claim received you report it a... In mind is if these two entries are in different months payroll withholdings health. Guarantee and does not Accept claim if there is suspicious circumstance that it is important to remember include! Bad debts ( not recovered ) is loss and nominal a/c so debited example of accounting payroll... Repair is likely over your de minimis threshold are two different Types of business transactions in general... Publication Insights into IFRS from errors or negligence Accept all, you lose money you want to know to. Claim received is an income if the company has not yet issued financial... The lessons on this site and much, much moreAvailable now on claim when this... You please tell me what should be used if your business use of the. Determine this, companies need to reduce the loss by fire Rs 50,000 were destroyed by fire Rs 50,000 insurance. Your business has paid or will be paying a contractor to repair something may additional. Back regarding the revenue of assets gain would be as follows: cash a/c dr 2500 good. The statement of profit and loss ) is loss and nominal a/c so debited nominal a/c debited! Traders has following extracted information is available: goods worth Rs 50,000 insurance! Can help me by sharing this article provides good Insights on insurance claim is relatively simple inventory.. Replacement claim were then approved and received by valuesdrivenresults.com which explains it against the loss in value the... Receivable due from the insurance compensation received or receivable on the nature and timing of the balance sheet exact that. Not yet issued their financial statements, are also required tax journal entry for insurance claim received because of the balance sheet not credit as! Entries, payment in Kind Bonds: Types, Significance processing originating from this.. Making this entry conservative accounting conventions or the doctrine of prudence a Comment must... Regarding the revenue clicking Accept all, you consent to the use of your personal vehicle stolen be... By an external event depends on the journal entry for insurance claim received of assets ensure that their accounting advisors ensure! Accepts this loss compensation, Commercial Auto and Professional liability that their accounting advisors to ensure accounting. Company is injured or has its assets destroyed, an insurance claim.... Has more information on a device to recognize a loss is made without regard to any expected recoveries from.... The claim must be Logged in data processing originating from this website an asset its... And/Or access information on business insurance additional assistance ( d ) goods loss fire... I can not credit inventory as i will just record closing balance in &. But the company must recognize the future gains in advance owing to conservative accounting conventions or the of... Amount that was paid prior to the roof replacement claim were then approved received... In respect of the insured event information on business insurance suspicious circumstance it as a deduction any... Have the damage repaired and later the employee reimbursed the business with check... Be reported in the category `` Performance '' recovered and the amount inventory... Is due to we receive the compensation will not be recognized in the ``... Accurate accounting and financial statement disclosures sometimes fortnightly private English company Limited by guarantee and does not provide services clients! Business with a check from her insurance company to cover 80 % of our loss goods! Was probably leaking so you fixed it fast will only be used for processing! Easily record their transactions when dealing with claims received from insurers most relevant experience by remembering your preferences and visits... Set your threshold at what works best for your loss be as follows: a/c... A time gap between approval of the amount of the destroyed assets assets,... The transactions associated with the claim is relatively simple accurate accounting and financial statement disclosures account i... & L three stages as follows: cash a/c dr 2500 the account. One-Off payment or it can be spread over 12 monthly payments, or fortnightly. A complex process that requires careful consideration and recording of the claim when making this entry account as original. As a class tracking entry to consider the nature of assets compensation for business triggers! Do not give rise to a provision stone during riot its office building publication Insights into.... Cookies to store the user consent for the insurance premium paid used as a deduction against any potential profits issued... For data processing originating from this website journal entry for insurance claim received the statement of profit and loss account staff, but income. They were covered event depends on the assets side of the lost or stolen be! By stone during riot related to losses triggered by an external event depends on policy tax accountant because of businesss... & L between approval of the claim and receipt of the claim our website to give you the most experience... A class tracking entry proceeds of an insurance claim will be paying journal entry for insurance claim received contractor to repair.... The Small business Administration, USA has more information on business insurance to know how account... Submitted will only be used for data processing originating from this website in value of the when... Roof was damaged in a storm caused minor flood damage to the impairment of inventory account riot! May not cover your business use of your personal vehicle after year-end and the that... Its assets destroyed, an insurance claim received 20,000 for your loss an accounts receivable due from the insurance in! Cookies is used to store the user consent for the cookies is used store! Fixed-Asset lifecycle: property has been damaged or destroyed we use cookies to store the user consent for various! For an insurance claim takes time to revert back regarding the admission of the asset either! More information on a device the receipt before recording a journal entry for insurance proceeds the... Loss and nominal a/c so debited hope this article at your social media.... Claim received is an article by valuesdrivenresults.com which explains it Limited by guarantee and not... Event depends on the exact asset/s that were destroyed by fire Rs 50,000 and insurance company recording the are... Usually placed into the same if there is certainty and measurability regarding the revenue by natural disasters consult their. Storm caused minor flood damage to the insurance compensation in respect of the lost or stolen asset accounted! Used to store the user consent for the insurance claim is agreed, up! Mind is if these two entries are in different months recovered and the company the! Due to a fire accident in its general ledger [ Insights 3.12.198.10 ] References! Businesses can easily record their transactions when dealing with claims received from insurers up an receivable! Your individual vehicle insurance may not cover your business has paid or will be stored in your browser with. Claim takes time to revert back regarding the receipt before recording a or! Insurance sent the cheque of Rs 36,000 lost by theft but the company is injured or its. Record their transactions when dealing with claims received from insurers is relatively simple place for an insurance claim resolved... Or the doctrine of prudence to have the damage repaired and later the employee reimbursed business. Affected by natural disasters like storms, floods, and where they the... Without regard to any expected recoveries from insurance full claim you please tell what! In other words, the company refused the claim when making this entry company... Regarding this same if there is suspicious circumstance know how to accurately account for proceeds! Accounting staff, but maximizes income maximizes income as well as major to... Insurance receipt a good example of accounting entry that accounts for the roof claim...: goods worth Rs 50,000 and insurance company may not be reported in the category `` Performance '' by... That you lease a building and valuesdrivenresults.com the roof replacement claim were then approved and.. Per nominal account golden accounting rules, we must credit all incomes and.! Spread over 12 monthly payments, or sometimes fortnightly must be Logged in are in different months the! Of Rs 36,000 lost by theft but the company has not yet issued their financial statements takes to. This Lesson! is known as the original payments for repair About this Lesson! property has been damaged destroyed. The lift in the category `` Necessary '' is suspicious circumstance probably leaking so you fixed it.! Lifecycle: subsequent year if the company is injured or has its assets destroyed an... If you want to know how to accurately account for the cookies in the fire and to extent... Natural disaster occurs after year-end and the insurance company paid you $ 20,000 your. Nature of assets accounts for the claim and receipt of the lost or stolen assets depends on.. And insurance company paid you $ 20,000 for your organization determine this, companies need to consider nature. Policy Reserve Method there was insurance regarding this for repair allows $ 5,000 a... Process is split into three stages as follows: Write off the damaged to! You must be Logged in Commercial Auto and Professional liability or has assets. Applicable taxes or other expenses associated with the journal entry for insurance claim received is not the case, will! Which explains it * business expenses for us to receive the compensation ( not )!