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Sir in this question, they say that the company estimates value in use by using the expected cash flows.
In the answer they say that “cash flows used by scramble for the purposes of impairment do not comply with IAS 36”.
Sir how else am I supposed to calculate value in use? As per my understanding, value in use is calculated always buy discounting the expected future cash flows from the asset to present value.
But the answer in the revision kit says it’s wrong. Please help
The method is right but the discount rate is wrong. Should be discount rate reflecting:
1. Time value of money
2. Risk of assets.As opposed to something strange that the company is trying to use.
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