Intermediate Accounting .

Running head: INTERMEDIATE ACCOUNTING
Intermediate Accounting
Name of the Student
Name of the University
Author’s Note

1INTERMEDIATE ACCOUNTING
Table of Contents
Part A: Management Judgments................................................................................................2
Part B: Cash Flows.....................................................................................................................3
References..................................................................................................................................5

2INTERMEDIATE ACCOUNTING
Part A: Management Judgments
It needs to be mentioned that the business organizations use different judgments for
the purpose of financial reporting. Thus, it is required for the business organizations to
disclose the significant accounting policies along with the financial judgment used by the
managers in the financial statements of the companies. More specifically, they are needed to
disclose the judgments in the notes to the financial statements (deloitte.com, 2018).
The presence of many judgments can be seen having major impact on the financial
statements. One of them is the judgment for the recognition of revenue. It is needed for the
companies to exercise appropriate judgment that enables the companies in reaching
consistent conclusion for recognize revenue in economically similar situation. Another
significant judgment is the judgment related to the de-recognition of the financial assets or
liabilities. It is essential as the removal of recognized assets or liabilities from the balance
sheet has major impact on the financial position of the companies (ey.com, 2018).
The presence of estimation uncertainty can be seen in the classification of leases as
the companies are needed to make correct estimation for finance and operating leases. After
that, the estimation uncertainty can be seen in the fact that whether the acquisition id of the
business or a group of assets. After that, estimation uncertainty can be seen in the
determination of acquirer of the business combination. Lastly, estimation uncertainty can be
seen on the determination of the fact that whether an investee is a subsidiary or not
(deloitte.com, 2018).
It is needed for the business organizations to use the estimation of fair value method
relate to the price that the company would be received from the sales of an asset in an orderly
transaction between the market participants at the date of measurement (ir.homedepot.com,
2018). As per the 2017 Annual Report of The Home Depot, the company measures their