Management has considerable latitude in making judgments and estimates regarding portions of an asset's cost to expense and to retain on the balance sheet.

Question

Quizplus · Accepted Answer

Management has the responsibility of deciding how much of a cost to expense immediately and how much to keep on the balance sheet. This decision requires the use of judgment and estimates based on financial reporting standards and principles. Therefore, management has considerable latitude in making these judgments and estimates.

Management Has Considerable Latitude in Making Judgments and Estimates Regarding