What is an accounting estimate IAS 8
An accounting estimate involves judgement by management based on the latest available information at the time.
Estimates include:
- The fair value of financial assets and liabilities
- Useful life of property, plant & equipment / depreciable assets
- Expected credit losses
- Inventory obsolescence
- Debt provisions
- Warranty obligations
A change of accounting estimate is accounted for on a prospective basis (going forward, not looking backward).
Who cares?
Auditors might.
You, because you will likely need to guess stuff, as estimating can be in essence, good old "guesswork".