How many accounting estimates would a company typically identify as critical accounting estimates under the proposed definition?
Should we expand the definition to include MD&A disclosure of volatile accounting estimates that use complex methodologies but do not involve significant management judgment? Should we do so only when the underlying assumptions or methodologies of those estimates are not commonly used and therefore not understood by investors?] In reading the NPR, our members wondered how they should distinguish between estimates and assumptions within the context of disclosing estimated MSR values. For example, should the estimated fair values that are incorporated into a company’s recorded MSR value be subject to evaluation as critical accounting estimates, or should the estimates underlying the estimated MSR values1 themselves be subject to evaluation as critical estimates? If a company’s estimated MSR values are subject to disclosure as critical estimates, the company presumably would disclose the methodology used to determine the MSR values (e.g. type of valuation model used) as well as the materi
Related Questions
- Is sufficient disclosure of past material changes in critical accounting estimates already required under current MD&A requirements?
- How many accounting estimates would a company typically identify as critical accounting estimates under the proposed definition?
- Would the proposed disclosure serve as a deterrent for improper accounting practices?
