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JANSEN & CO sept 18 part a) i) best estimate v/s hypothetical

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › JANSEN & CO sept 18 part a) i) best estimate v/s hypothetical

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by Kim Smith.
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  • October 27, 2021 at 11:51 am #639221
    Noah098
    Member
    • Topics: 935
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    • ☆☆☆☆☆

    The nature of the assumptions, that is, whether they are best?estimate or hypothetical assumptions – in this case it seems likely that they will be best estimate assumptions as Narley Co expects to obtain finance in order to fund its planned expansion.

    ma’am from your notes I understood that major difference between hypothetical and best estimate assumptions is that in case of former, the event is not likely to occur while in case of latter the probability is much higher/most likely to occur.

    here in this question nowhere is it written that the company expects the loan to be financed…so then how can we say that it is best-estimate example?

    October 27, 2021 at 5:20 pm #639255
    Kim Smith
    Keymaster
    • Topics: 136
    • Replies: 8375
    • ☆☆☆☆☆

    A student sits the AA exam. They omit to answer a 20-mark question. Hypothetically, they could get 80%. The students best estimate is that they scored 60%.

    Which mark will they expect? 60% or 80%?

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