Insurance claims

Below are broady standing charges that needs to be insured. Ones not insured, will be uninsured. Interest on Debentures, Mortgage Loans and Bank Overdrafts, Rent, Rates and Taxes (other than taxes which form part of net profit) Salaries of Permanent Staff and Wages to Skilled Employees, Boarding and Lodging of resident Directors and/or Manager, Directorsâ?? Fees, Unspecified Standing Charges [not exceeding 5% (five per cent) of the amount recoverable in respect of Specified Standing Charges]. Generally, in questions, you will have info about insured and uninsured. In few illustrations, they will give part information like - Out of the standing charges only such amount has been insured, and you will have P&L account given. Then you should first identify what expenses are standing in nature and then find uninsured. Example: In ICAI Illustration 11, they have given standing charges insured were 50k. From P&L, you find that administrative and finance charges are standing (as they are fixed in nature), there total is 1.8L, but since only 50k are are insured, 1.3L will be insured. Here, selling expenses will not be considered as standing as they are variable.

Sahibdeep Singh

CA Inter

★ 14K+

10-Oct-21 21:59

That part of standing charges for which Insurance Company is agree to provide cover under their policy is called insured standing charges, and remaining standing charges are called uninsured standing charges)

khushi goyal

CA Final

★ 2K+

10-Oct-21 13:23