publication . Article . Preprint . 2006

Including Estimates of the Future in Today's Financial Statements

Mary Barth;
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  • Published: 01 Sep 2006 Journal: Accounting Horizons, volume 20, pages 271-285 (issn: 0888-7993, eissn: 1558-7975, Copyright policy)
  • Publisher: American Accounting Association
Abstract
<jats:p>This paper explains why the question is how, not if, today's financial statements should include estimates of the future. Including such estimates is not new, but their use is increasing. This increase results primarily because standard-setters believe asset and liability measures that reflect current economic conditions and up-to-date expectations of the future will result in more useful information for making economic decisions, which is the objective of financial reporting. This is why standard-setters seem focused on fair value accounting. How estimates of the future are incorporated in financial statements depends on the asset and liability measurem...
Subjects
free text keywords: financial statements, fair value, financial reporting, Accounting, Economic benefits, Business, business.industry, Financial ratio, Substance over form, Finance, Liability, Accounting management, Financial analysis, Actuarial science, Fair value, jel:E58, jel:G15, jel:M41
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