Accounting estimate definition
What is an Accounting Estimate?
Accounting estimates are approximations of measurement to recognize the account in the financial statements. Accounting estimates are needed when an event has not occurred but has a great possibility of occurring, and these estimates are created on the accrual basis of accounting to complete the financial statements and show a fair view of the organization.
Examples of Accounting Estimates
Examples of accounting estimates could be loss in a claim against the company, Bad debts provisions, Provisions for warranty claims, etc.
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