The 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
|Module||Accounting + Oversight|
|Coverage||All ’33 & ’34 Act Filers|
|Availability||Online • Data Feed • Excel • WRDS|
DocumentationAccounting + Oversight
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