Application Of Management Judgement And Estimate For Items Disclosed

717 Words Mar 31st, 2015 3 Pages
4. Extent of application of management judgement and estimates for items disclosed in all of MFT’s financial statements

In NZ IFRS it accurately relates all the transaction that transpired in MFT, in which, administration will intend to use its judgement in forming and relating an accounting policy that causes information to be: 
”relevant to the economic decision-making needs for users and reliable” (NZ IAS 8, 2004, para. 10). This statement refers back to the conceptual framework in which the definitions of accounting elements will support management in making judgements. But, also it uses accounting standards and accounting policies in making judgements. As stated, “In applying… accounting policies, management continually evaluates judgements, estimates and assumptions based on experience and other factors, including expectations of future events that may have an impact on the Group” (Mainfreight, 2014, p.90). This interprets that all judgements and estimates made are too reasonable. The comparison with the other financial statements is that the balance sheet only displays the financial position at a certain date. Whereas, the income statement illustrations the profits and losses that occurred during the period using accrual accounting. Where, the cash flow statements justifies the movements in cash and cash equivalents. Significant judgements and estimates were made by MFT management in which the most important judgements were the allocation of goodwill. Since…

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