In this section, we summarize a few key elements of our perspective on discretion in conservatism. At the outset, it is important to bear in mind that conservative accounting primarily manifests in the timely recording of bad news based on estimations of future cash flows that are not necessarily verifiable, for example via asset write-downs. Consequently, it provides managers with significant scope for discretion. This discretion can potentially serve one of two purposes. Managers can use the discretion available to them to form their own appropriate assessments about the need for asset write-downs and the appropriate magnitudes thereof. However, since such asset write-downs are often essentially admissions of failure to extract value out of past investments, managers can also have opportunistic motives to exploit their discretion to delay recording write-downs.