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value in use

5 August, 2015 - 14:41

This may involve a lot of forecasting . For the intended time the asset is held, an estimate is made of the future cash flow generated in, and the future cash flow costs out, extrapolated back according to low-risk interest rates to present value (the future cash flows would have estimates of inflation and budgeted price increase though). This quantification of future economic benefit is added to the net cash flow from budgeted disposal.