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In Loss of Profit Insurance Claim

Accountancy

Why do we take adjusted annual turnover when calculating Gross Profit under Allowable Increased Cost and not regular turnover? Also, while calculating Insurable Sum, why do we calculate it as GP% x Adj Annual T/O?

Kishore Anil

CA Inter

★ 2K+

15-Feb-21 19:07

290

Answers (1)

Best Answer

Adj Annual turnover basically indicates - what would have been the annual turnover after adjusting for trends. Insurance for profits is for future profits and not past profits.