Insurance Claims

Code: 1152
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Account Information

Account Type 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

International Accounting Standards

IFRS IAS 37 Provisions, Contingent Liabilities and Assets

Insurance recoveries recognised as asset when virtually certain to be received.

US GAAP ASC 450 Contingencies

Insurance recoveries recognised when realisation is probable. Cannot exceed related loss.

⚠ Key Difference: IFRS vs GAAP

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