Buildings & Liability Insurance Premium (Prepaid)
Annual insurance premium for campus buildings, contents, and public liability.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Prepaid Insurance (Campus) | Asset (+) | 24,000.00 | - |
| Cash / Bank | Asset (-) | - | 24,000.00 |
💡 Accountant's Note
Comprehensive campus insurance is a mandatory operating cost. The annual premium is prepaid and amortized at JOD 2,000/month over the 12-month coverage period.
Practitioner & Systems Framework
💻 ERP Architecture
Campus insurance premiums are paid annually to the insurer and recorded as prepaid assets. The monthly amortisation (JOD 24,000 / 12 = JOD 2,000) is posted automatically from the prepayments module. The insurance register tracks all active policies (buildings, contents, public liability, professional indemnity, employers' liability) with coverage amounts, policy numbers, and renewal dates. The facilities or finance team ensures that sums insured are reviewed annually against reinstatement values — underinsurance creates a proportional penalty in claims settlements.
⚠️ Audit Flags
Auditors confirm that all campus buildings are insured at adequate reinstatement value. Test the amortisation calculation and confirm the prepaid balance at year-end equals the remaining months' coverage. Verify that new buildings are added to the insurance policy promptly on completion. Confirm that insurance claims have been reported to the insurer in the required timeframe. For any claims in progress, assess whether a receivable should be recognised and whether any uninsured losses should be expensed.
📄 Required Documentation
Insurance policy schedules (all lines of coverage), premium invoice, amortisation schedule, reinstatement value assessment, claims register (if any claims), and policy renewal confirmation.
Automate this entry with the JEH Accounting Suite
Stop doing manual entry. Our VBA-powered ERP automatically generates your ledgers, Trial Balance, and Financial Statements.
No Subscriptions. Own your data.
Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.