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Hello, Please help me to understand that when discounted value of Maize (i.e. 48.85) was recognised in Profit & Loss on 31 Oct 2014 its undiscounted expected value was $80M, but when It was valued again on 31 Jan 2015 it’s valued $76M (means expected value decreased by $4M) than how they get $6.05M (54.9 – 48.85) profit just by unwinding discount?
Whereas 54.9 is discounted value of 56 (76-19-1).
Also, Operating cost is additional cost after cash outflow??
Thanks
Hi,
The previous estimate of fair value was 48.85 and now the value has changed to 54.9, hence the difference of 6.05. This is not unwinding any discount, it is just comparing the difference in the calculated fair values.
You don’t need to do any discounting of the operating costs as they are the actual figures that arise in that particular period.
Thanks
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