Insurance
Litigation Reserve — Disputed Claim
Setting a reserve for a claim where the insured has initiated legal proceedings against the insurer.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Claims Expense (Litigation Reserve) | Expense (+) | 50,000.00 | - |
| Litigation Reserve (Claims Liability) | Liability (+) | - | 50,000.00 |
💡 Accountant's Note
When a claim is disputed and goes to court, a litigation reserve is set based on legal opinion. Legal costs (LAE) are reserved separately. The provision follows IAS 37 criteria — probable and estimable.
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