![]() ![]() 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. the loss event that creates a right for the company to assert a claim at the reporting date has occurred and the claim is not disputed by the insurer.it has an insurance contract under which it can make a claim for compensation and.Following that guidance, a company recognises the compensation for business interruption as a receivable when it has an unconditional right to receive the compensation.Ī company would have an unconditional contractual right to receive compensation if: Therefore, compensation for business interruption is not a reimbursement right under IAS 37 and should be accounted for by analogy to guidance on compensation for impairment under IAS 16 Property, Plant and Equipment. Lost profits, by themselves, do not give rise to a provision. If the employers reimbursement rate exceeds the standard rate, the excess amount is taxable to the employee as regular wages. ![]() For example, if all restaurants are ordered to close by the government, then they may be able to claim under their insurance contracts. As of January 1, 2013, the standard mileage rate is 56.5 cents per mile. 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. for lost profits caused by a specific external event. Insurance proceeds may compensate a company for business interruption – e.g. The amount recognised as a reimbursement right is limited to the amount of the related provision. 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. Insurance proceeds may reimburse some or all of the expenditure necessary to settle the provision. As a result of an external event, a company may struggle to fulfil its legal or contractual obligations and may incur penalties that give rise to a provision. The payment must attach with proper supporting documents. Under IFRS ® Standards, the accounting for insurance proceeds depends on whether a company recognises a provision for the insured event. The employee must reimburse to company as soon as possible after completing the transactions. Under IFRS ® Standards, the accounting for insurance proceeds depends on whether a company recognises a provision for the insured event.Īs a result of an external event, a company may struggle to fulfil its legal or contractual obligations and may incur penalties that give rise to a provision. Office supplies Business Traveling Other small expenses which usually paid by petty cash All of these expenses must be record within a proper accounting period. ![]()
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