Page 278 - Fire Insurance Ebook IC 57

Fire and Consequential Loss Insurance

production sections.

For industries having cost accountancy methods, it is
however, easier to determine the value of the stock in
process. After determining the quantity affected, it is
possible to assess the loss based on cost of raw materials
consumed up to the point of loss, and the direct cost of
production. In simple cases, it is easy to determine the
quantity of the stock in process by ascertaining how
much material is usually retained in the process.

After ascertaining the quality and valuation, the value
of salvage, if any, is determined in consultation with the
technical staff of the insured in the light of which
decisions regarding reuse or disposal is taken.

In regards to finished goods ready for sale, the quantities
destroyed or damaged have to be determined by visual
inspection of salvage, storage space etc and with
reference to production records and books of accounts.

Q10. Discuss the matters to be contained in the

Sashi Publications - www.sashipublications.com 291

Copyright@ The Insurance Times. 09883398055 / 09883380339