Accounting Estimates802.1 Preparation of financial statements normally requires making accounting estimates. SAS No. 57, Auditing Accounting Estimates (AU 342.01),
defines an accounting estimate as “an approximation of a financial
statement element, item, or account” in the absence of exact
measurement. The following are examples of accounting estimates may be
relevant to CIRAs:
a. Net realizable values of assessments receivable.b. Valuation of common property contributed by the developer/sponsor.c. Valuation of securities.Accounting estimates may involve fair value measurements (see the discussion beginning at paragraph 802.8).