THE EFFECTS OF ACCOUNTING ESTIMATES OF TANGIBLE FIXED ASSETS ON ENTERPRISE FINANCIAL STATEMENTS

Abstract

Financial statements show the financial status as well as business results of
the business. Management decision-making depends mainly on the financial
information disclosed at the time of making the financial statement. Meanwhile,
financial information is heavily dependent on accounting estimates. Tangible
fixed assets account for a significant proportion of the total assets of the
enterprise. There are many methods of applying estimates in fixed asset
accounting to record and measure tangible fixed assets, resulting in different
financial status and business performance. Applying the empirical analysis,
designing the balance sheet and basing on the business performance report of
an enterprise, the research shows that the uncertainty of the financial condition
and the performance of a firm result from different accounting estimates for
tangible fixed assets.