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hello and welcome to this session this is professor forhat in which we will discuss accounting changes we have three types of accounting changes and those are change and accounting principle which we already discussed in the prior session we have change in accounting estimate in this session we will focus on change and accounting estimate now what is a change in accounting estimate well companies do estimates all the time bad debt expense when you compute bet that expense its an estimate you dont know what the future but that expense will be but youll have to book a number today and when you book that number you make an estimate when you book that number same for warranty expense if you sell a product and a warranty comes with that product you have to estimate that warranty expense therefore thats another accounting estimate period benefit by the third cost you will have the third cost well whats going to happen youre going to have to spread that the third cost over period benefi
