C. Guidelines for Reporting Insurable Values
1. Buildings
a. General
For the purpose of this report, include those costs recorded in General Ledger account F2200-001 for original cost of Buildings / Land Improvements. Also include permanent improvements and betterments. Include all buildings, construction in process, fully depreciated assets, and leased buildings/structures that Caterpillar has an obligation to insure. For construction in process, report only the actual insurable value that exists at risk on the reporting date. Once construction is complete, please update this information with an e-mail to Monica Chen (see Section E for contact information).
b. Leased vs. owned location reporting
i. Leased
• Obtain a copy of the lease and read what property insurance is required and who is to carry the insurance, i.e., Caterpillar or Landlord. Lease copies can be obtained from Corporate Real Estate. Please contact Reid Northrup of CPC with questions on interpreting your lease terms.
• If Caterpillar is responsible for providing insurance protection on any leased building or any leased machinery or equipment not capitalized on Caterpillar records, then the appropriate value should be secured from the lease agreement or lessor and these values should be factored each year in the same manner that fixed assets are factored.
ii. Owned
• Existing buildings should be valued at replacement value. Also include permanent improvements and betterments. Include all buildings, construction in process, fully depreciated assets, and leased buildings/structures that Caterpillar has an obligation to insure.
• Use of Trend Factors - apply trend factors to all building values. The use of trend factors is needed to arrive at replacement cost. Multiply the original cost of buildings / land improvements (the cost recorded in General Ledger account F2200-001), by the appropriate years trend factor. If you do not have the current years trend factors, please contact Monica Chen.
• Appraisals. Buildings should periodically be reappraised to ascertain their true replacement value. FM Global recommends new appraisals should be completed every ten years. After ten years, their trend factors become less realistic. Caterpillar could benefit from the reappraisal if the “trended” values become overstated, which results in higher premiums.
• Buildings under construction - For construction in process, report only the actual insurable value that exists as of January 31, 2014. However, if the building will be completed before July 1 and its values will differ greatly from those as of January 31st, please contact Alex Wilson of Corporate Property & Casualty for guidance on how to report values in the IVR.
C. Guidelines for Reporting Insurable Values
1. Buildings
a. General
For the purpose of this report, include those costs recorded in General Ledger account F2200-001 for original cost of Buildings / Land Improvements. Also include permanent improvements and betterments. Include all buildings, construction in process, fully depreciated assets, and leased buildings/structures that Caterpillar has an obligation to insure. For construction in process, report only the actual insurable value that exists at risk on the reporting date. Once construction is complete, please update this information with an e-mail to Monica Chen (see Section E for contact information).
b. Leased vs. owned location reporting
i. Leased
• Obtain a copy of the lease and read what property insurance is required and who is to carry the insurance, i.e., Caterpillar or Landlord. Lease copies can be obtained from Corporate Real Estate. Please contact Reid Northrup of CPC with questions on interpreting your lease terms.
• If Caterpillar is responsible for providing insurance protection on any leased building or any leased machinery or equipment not capitalized on Caterpillar records, then the appropriate value should be secured from the lease agreement or lessor and these values should be factored each year in the same manner that fixed assets are factored.
ii. Owned
• Existing buildings should be valued at replacement value. Also include permanent improvements and betterments. Include all buildings, construction in process, fully depreciated assets, and leased buildings/structures that Caterpillar has an obligation to insure.
• Use of Trend Factors - apply trend factors to all building values. The use of trend factors is needed to arrive at replacement cost. Multiply the original cost of buildings / land improvements (the cost recorded in General Ledger account F2200-001), by the appropriate years trend factor. If you do not have the current years trend factors, please contact Monica Chen.
• Appraisals. Buildings should periodically be reappraised to ascertain their true replacement value. FM Global recommends new appraisals should be completed every ten years. After ten years, their trend factors become less realistic. Caterpillar could benefit from the reappraisal if the “trended” values become overstated, which results in higher premiums.
• Buildings under construction - For construction in process, report only the actual insurable value that exists as of January 31, 2014. However, if the building will be completed before July 1 and its values will differ greatly from those as of January 31st, please contact Alex Wilson of Corporate Property & Casualty for guidance on how to report values in the IVR.
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