Accounting Estimate • Accounting estimate – An approximation of a monetary amount in the absence of a precise means of measurement. This term is used for an amount measured at fair value where there is estimation uncertainty‚ as well as for other amounts that require estimation. PSA 540 9 The auditor shall review the outcome of accounting estimates included the prior period financial statements‚ or‚ where applicable‚ their subsequent re-estimation for the purpose of the current period. The nature
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Executive Summary Disclosure of significant sources of estimation uncertainty and judgments in applying accounting policies are two important requirements in financial reporting‚ although these are the most subjective and complex areas‚ they are of significance in making business decisions to users of financial statements. This paper compares our company ’s current accounting practice with the requirements in respective accounting standards in relation to disclosure of sources of estimation uncertainty
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The Usefulness of Accounting Estimates for Predicting Cash Flows and Earnings Baruch Lev* New York University Siyi Li University of Illinois Theodore Sougiannis University of Illinois and ALBA January‚ 2009 * Contact information: Baruch Lev (blev@stern.nyu.edu)‚ Stern School of Business‚ New York University‚ New York‚ NY 10012. The authors are indebted to the editor and reviewers of the Review of Accounting Studies for suggestions and guidance‚ and to Louis Chan‚ Ilia Dichev‚ John Hand
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1. Identify all the accounting policy changes and accounting estimates that Harnischfeger made during 1984. Estimate‚ as accurate as possible‚ the effect of these on the company’s 1984 reported profits. Changes that affect the Harnischfeger Revenues: • The company started to account Kobe Steel sales in US‚ previously it only added the gross margin in the financial statement. (this sales represented $28 million) • Sales to a foreign subsidiary started to be consolidated as a net revenues (this
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An accounting estimate can be defines as an adjustment of the carrying amount of an asset or a liability or the amount of the periodic consumption of an asset that results from the assessment of the present status and the expected future benefit and obligation associated with assets and liabilities.(IASB) An example of an accounting estimate is company A making a 5% provision for bad debts on credit sales. This is because company A can’t know how much of its receivables that they won’t be able to
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According to Weetman (2006 p25) ‘accounting is the process of identifying‚ measuring and communicating financial information about an entity to permit informed judgements and decisions by users of the information.’ If we extract the suffix of the word‚ we are left with the word ‘account’. To account for something is to take something into consideration. In terms of finance‚ accounting for something can be seen as baring it in mind when compiling financial information. Synony mously‚ taking something
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ACCT302 COST ACCOUNTING FINAL EXAM EXAMPLES Demonstration Problem 1 Asani Corp. manufactures an electronic unit that plays a wide variety of video games on a television set. The units are entirely assembled in one production department. All manufacturing costs are incurred at a uniform rate throughout the production process. The following information is available for the month ended March: |Beginning inventory of Work in Process | |$154
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ZAMBOECOZONE Authority and Freeport Material Recovery Facility Rationale The ZAMBOECOZONE is considered as one of the secondary growth centers identified in the Zamboanga City Master Development Plan‚ to sustain its economy the ZAMBOECOZONE would require the basic infrastructure and public services such as Solid Waste Management‚ these refers to all activities pertaining to the control‚ transfer and transport‚ processing and disposal of waste in accordance with the best principles of public
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AACE International Recommended Practice No. 34R-05 BASIS OF ESTIMATE TCM Framework: 7.3 – Cost Estimating and Budgeting Acknowledgments: Todd Pickett‚ CCC (Author) Peter R. Bredehoeft‚ Jr. Ted A. Downen Larry R. Dysert‚ CCC Bruce G. Elliott‚ CCC John K. Hollmann‚ PE CCE Copyright 2010 AACE International‚ Inc. Stephen M. Jacobson CCC Carlton W. Karlik‚ PE Christopher L. Kinney Donald F. McDonald‚ Jr. PE CCE PSP Bernard A. Pietlock CCC Richard A. Selg‚ CCE AACE International Recommended Practices
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following are a few examples of estimation: an auto company may want to estimate the mean fuel consumption for a particular model of a car; a manager may want to estimate the average time taken by new employees to learn a job; the U.S. Census Bureau may want to find the mean housing expenditure per month incurred by households; and the AWAH (Association of Wives of Alcoholic Husbands) may want to find the proportion (or percentage) of all husbands who are alcoholic. The examples about estimating the
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