Question

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The accountant uses significant judgment in the valuation of assets. How does the accountant use estimates and judgment in the valuation of property, plant, and equipment? Is it ethical for an accountant to use estimates and varying methodology to achieve desired corporate results? Participate in follow-up discussion by challenging or confirming your classmates' positions. Support your challenges with external references. Your initial post should be 250-500 words

Answer 1

Judgements and estimated are required in valuation of property,plant and equipments at the the installation and for caluculationg carrying values and impairmnet losses also and it is fairly ethical and legal. Judgemnet nad estimation are required in the areas, if there is change in circumstances supported by techonlogical advances which makes existing plant and equipment obslete and company may have to compete with industries.Judgement is required in deterining useful life of the asset so as to calculate depreciation.

The fair value of these assets is based on valuation techniques. The valuation models require input based on assumptions about the future. The management uses its best knowledge to estimate fair value of acquired intangible assets as of the acquisition date. The value of intangible assets is tested for impairment when there is an indication that they might be impaired. The management must also make assumptions about the useful life of the acquired intangible assets which might be affected by external factors such as in creased competition.