Managerial accounting is more than recording, maintaining, and reporting financial results.
Managerial accountants must provide managers with both financial and nonfinancial information including estimates, projections, and forecasts. There are many accounting estimates that management accountants must make, and Best Buy must notify shareholders of these estimates.
Required
1. Access and read Best Buy’s “Critical Accounting Estimates” section (six pages), which is part of its Management’s Discussion and Analysis of Financial Condition and Results of Operations section, from either its annual report or its 10-K for the year ended March 3, 2007 [BestBuy.com]. What are some of the accounting estimates that Best Buy made in preparing its financial statements? What are some of the effects if the actual results of Best Buy differ from its assumptions?
2. What is the management accountant’s role in determining those estimates?