Note 2, Basis of Presentation (part d), in Reitmans (Canada) Limited 's financial statements states The preparation of the financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reporte...

Reitmans management is required to use estimates in order to provide information that is both releva ...

Note 2, Basis of Presentation (part d), in Reitmans (Canada) Limited's financial statements states: The preparation of

Question:

Note 2, Basis of Presentation (part d), in Reitmans (Canada) Limited's states: "The preparation of the in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, the disclosure of contingent assets and at the date of the and reported amounts of revenues and expenses during the period."
Instructions
Explain why Reitmans' management is required to use estimates in the company's Support your answer with reference to the objective of financial reporting and the qualitative characteristics.
Taking It Further
Which qualitative characteristics may be sacrificed when management is required to make estimates in the that may diff er materially from actual results?
Contingent liabilities
A contingent liability is an obligation of business related to an uncertain future event. The business must record it in its financial statements if the amount can be reliably estimated and it is probable that amount will be paid by business as a... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...