ACCOUNTING ESTIMATES: IMPLICATIONS FOR FAIRNESS OF FINANCIAL REPORTING

Abstract

Purpose: to define the term «accounting estimates», to explore and classify different types of estimates, to analyze the influence of professional accounting judgment on fairness of financial reporting. Discussion: essential differences in accounting judgments is driven by variety of existing methods in accounting estimates as well as by differences in recording these estimates in ledger and balance sheet accounts. Article reveals comparative analysis for a number of accounting estimates, in particular, reserve estimates, estimated liabilities and charter capital related accounting estimates. Results: we explored characteristics of each estimates in the scope of the research. The author focused on possibilities to manipulate or misstate reporting information applying accounting estimates to improve financial reporting information quality.