02-15-2011, 02:01 AM
Dear Umar
The value in use of an asset is determined by discounting the cash flows (net) for the whole useful life of the asset including anticipated disposal proceeds if any. In the situation you've mentioned the cash inflows from the first year should be taken as nil and the inflows from the rest of the useful life will be considered while calculating VIU. So, in this case also recoverable amount will be higher of Net Selling Value and VIU.
Regards
Shoaib
The value in use of an asset is determined by discounting the cash flows (net) for the whole useful life of the asset including anticipated disposal proceeds if any. In the situation you've mentioned the cash inflows from the first year should be taken as nil and the inflows from the rest of the useful life will be considered while calculating VIU. So, in this case also recoverable amount will be higher of Net Selling Value and VIU.
Regards
Shoaib