Changes in accounting estimates
Find out whenever a company discloses a change in accounting estimate that will affect earnings.
The Ideagen Audit Analytics changes in estimates database tracks all material changes in accounting estimates (ASC 250-10-50-4) for SEC registrants (foreign and domestic) as disclosed in annual and quarterly filings.
Identify cases where a company meets earnings estimates due to the impact of a change in estimate
Use our proprietary taxonomy to analyze types of estimate changes by industry and accounting topic
Use changes in accounting estimates as a factor to gauge financial reporting quality
Key data points include impact on income and EPS and the period in which the change was disclosed
Changes in accounting estimates are sometimes used as a tool to manage earnings. The allowance for doubtful accounts, the method of depreciation of assets, provisions for legal contingencies, hedging and derivative valuations — all these things require estimates and estimates always involve some assumptions.
For the sake of comparability between periods, such assumptions are expected to remain the same, unless a good reason arises to change them (ASC 250-10-45-19). When these assumptions are changed, they must be disclosed if they are material. A change in accounting estimate (CAE) is made at the discretion of management and affects the operating results of the period in which the change occurs.
Rule: ASC 250