Question

What guidance does IFRS 13 provide about the cash flow estimates and discount rate when valuing...

What guidance does IFRS 13 provide about the cash flow estimates and discount rate when valuing a specific asset, like production equipment?

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Answer #1

IFRS 13 provides a guidance that while measuring fair value of fixed assets, specified financial assets, intangible assets, or liabilities, different techniques on valuation can be applied auch as the cost approach, the market approach, and the income approach. IFRS 13 has not provided a specific present value technique; the availability of the data in the market for a specific type of asset or liability impacts the adjustment on discount rate. The current replacement cost (or cost approach) is specifically used for measuring the fair value of tangible assets, such as production equipment

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