Accounting estimates: Be aware of management blind spots

Description

Abstract: A company’s management may make every effort to remain impartial and objective when making estimates for its financial statements. But errors of judgment are still possible. This article explains that it’s important for lenders to stay vigilant and ensure that the financial statements they receive from their borrowers are accurate and well founded. It notes that sorting through the layers of objective data and subjective assumptions until the full picture is clear will help lenders make well-informed decisions about their borrowers going forward.