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Please clarify re Value in use measurement

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Please clarify re Value in use measurement

  • This topic has 1 reply, 2 voices, and was last updated 5 years ago by P2-D2.
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  • April 23, 2020 at 11:35 am #568999
    ordovskayas@gmail.com
    Member
    • Topics: 3
    • Replies: 0
    • ☆

    Dear Sir,

    from the lecture it is quite clear how to calculate the value in use in terms of the calculations themselve, but could you please clarify what cash flows must be taken? can you give some example?
    Are these the cash flows that we are paying to the leasing company for the asset the we use? or are these the cash flow that the asset is generating for us? then how do we find out what they are?

    thanks a lot in advance for your reply,

    April 23, 2020 at 8:21 pm #569085
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7177
    • ☆☆☆☆☆

    Hi,

    These are the cash flows from the future sales (inflows) and costs incurred in generating these sales (outflows). They are judgmental and so subject to risk, hence would need to be audited and checked for reasonableness and the assumptions verified.

    Thanks

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