Wiley Practitioner's Guide to GAAS 2013: Covering all SASs, SSAEs, SSARSs, and Interpretations

AU 342: Auditing Accounting Estimates1

AU-C 540: Auditing Accounting Estimates, Including Fair Value Accounting Estimates and Related Disclosures

AU EFFECTIVE DATE AND APPLICABILITY

Original Pronouncement	Statement on Auditing Standards (SAS) 57.
Effective Date	This standard is now effective.
Applicability	Audits of financial statements in accordance with generally accepted auditing standards (GAAS).

AU-C EFFECTIVE DATE AND SUMMARY OF CHANGES

SAS No. 122, Codification of Auditing Standards and Procedures, is effective for audits of financial statements with periods ending on or after December 15, 2012.

AU-C 540 does not change the extant requirements of AU 342 in any significant respect. AU-C 540 supersedes AU-C 328, Auditing Fair Value Measurements and Disclosures, and AU 342, Auditing Accounting Estimates.

AU DEFINITIONS OF TERMS

Accounting estimate. An accounting estimate is an approximation of a financial statement element, item, or account. Accounting estimates are included in historical financial statements because (1) the measurement of some amounts or the valuation of some accounts is uncertain, pending the outcome of future events, or (2) relevant data concerning events that have already occurred cannot be accumulated on a timely cost-effective basis.

Accounting estimates in historical financial statements measure the effects of past business transactions or events, or the present status of an asset or liability. Examples of accounting estimates include (1) net ...