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hi john, can you please tell me the difference between replacement cost and current cost, because they both seem very similar to me?
thanks and regards
And also, what is the difference between an accounting estimate and accounting policy?
The current cost and the replacement cost are the same thing.
An accounting estimate is the accountants guess at something – for example, when depreciating it is an estimate as to how long they will keep the asset and it is an estimate as to what the final scrap value will be.
An accounting policy is how they decide to deal with things. For example, if the choose to use straight line depreciation (instead of reducing balance depreciation) then that is their accounting policy.
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