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HI tutor. I would like to ask for the impairment test. The recoverable amount will be determined between value in use and fair value. If the question stated the rights will generate future cash inflows of 15000 per year and the company will incur an annual expenditure to maintain the right. do we have to minus the inflow with the expenditure to find the value in use?
Thank you.
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It’s not often that I look at the other fora so you were quite lucky that Lancashire lost to Durham and I was wondering what to do because the match finished early!
Value in use is the “NET PRESENT VALUE OF THE CASH INFLOWS GENERATED ……” that is the NET present value
So, simply, yes. It’s the 15,000 per annum as reduced by the related cash expenditure
OK?
(and, in future, post a question addressed to the tutor on “ask the tutor”!)
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