accounting estimate

Definition

An approximation in a financial statement of the amount to be credited or debited on items for which there is no precise means of measurement, such as depreciable assets or provisions for a loss from a lawsuit. Estimates are based on the judgment and specialized knowledge derived from past experience.

Use accounting estimate in a sentence

The accounting estimate was really good and I thought that we needed a bit more help in our financial department.

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After my company was sued for violations of the Mann Act, my boss put me in charge of providing an accounting estimate of our potential exposure from the lawsuit.

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ACCOUNTING ESTIMATE An approximation in a financial statement of the amount to be credited or debited on items for which there is no precise means of measurement, such as depreciable assets or provisions for a loss from a lawsuit. Estimates are based on the judgment and specialized knowledge derived from past experience.

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