Under IFRS, Value in Use of a Long-Life Asset Is

question 53

Multiple Choice

Under IFRS, value in use of a long-life asset is ________.

• A) the greater of its recoverable value or its fair value less cost to sell
• B) the lesser of its recoverable value or its fair value less cost to sell
• C) the undiscounted future cash flows from use of the asset
• D) the discounted future cash flows from use of the asset

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Definitions:

Discount Rate

The interest rate by which future cash flows are devalued to their present worth in a DCF analysis.

Cash Flows

represent the net amount of cash and cash-equivalents being transferred into and out of a business.

Zero-Interest Financing

Zero-Interest Financing is a loan or credit offer with a 0% interest rate for a set period, making purchases more affordable upfront but often requiring a good credit score.

APR

Annual Percentage Rate, which represents the annualized cost of credit including interest and fees, making it easier to compare loan products.