According to IAS 36, a recoverable amount is the higher of an asset’s
fair value less cost to sell and asset’s value in use.
Fair value less cost to sell is the amount which could be obtained
from the sale of the asset after deducting expenses in order to sell
it (for example, some preparation or cleaning of asset before sale).
Basically, it is a price set in the sale agreement or market price of
similar assets.
Value in use is the discounted or present value of future cash flows
expected to arise from either continuing use of an asset and its
disposal at the end of its useful life.
fair value less cost to sell and asset’s value in use.
Fair value less cost to sell is the amount which could be obtained
from the sale of the asset after deducting expenses in order to sell
it (for example, some preparation or cleaning of asset before sale).
Basically, it is a price set in the sale agreement or market price of
similar assets.
Value in use is the discounted or present value of future cash flows
expected to arise from either continuing use of an asset and its
disposal at the end of its useful life.
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