Accounting Estimate Video Lecture | Principles and Practice of Accounting - CA Foundation

accounting estimates there are a few
situation my nuisance we use an
accounting a sense we use historical
cost the element of subjectivity is very
little it is the actual price that you
are paying as its and liabilities are
recorded at the actual prices that we
pick in slope there is no subjectivity
however in certain circumstances we need
to have certain accounting estimates one
example is when we charge depreciation
depreciation is usually based on the
estimated life of an asset we accept the
actual real life of the asset may be
slightly longer may be slightly shorter
but we make judgments based on our
information provisions for doubtful
debts is also another example we expect
we may expect a certain data to default
he may default even not deform we may
not identify another debtor who is going
to default but these are a couple of
instances where accounting estimates are
used and not just valuation principles
where we can correctly arrive better
when you interfere