Value in use

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The value in use ( German  value in use ) is in the international accounting IFRS the present value of an asset , which consists of the estimated future cash flows of that asset plus the residual value at the end of useful life , less the costs of disposal , is obtained.

Both the valuation rules IFRS and the US GAAP know the value in use ( English value in use ) as a value convention , with assets, a company for their commercial use are available and on future revenue lead.

While the fair value represents an objective market value , the value in use is a subjective valuation approach that reflects the individual benefit for the company. For example, an old truck for a coal merchant may have a very high value in use , while the fair value of the truck can be comparatively low.

If a company acquires assets A and B (market value € 1 million each) for a total of € 6 million, A and B are to be recognized at their value in use (the individual value for the acquiring company) at € 3 million each (none Business combination within the meaning of IFRS 3; approach at value in use according to IFRS 3.2 (b)). If, on the other hand, the company acquires the other company that owns assets A and B (market value again € 1 million each), the assets are to be recognized at their fair value (market value) of € 1 million each. The difference of € 4 million is the individual goodwill of the acquiring company ( business combination within the meaning of IFRS 3, fair value approach ).

This value in use is a company-specific value and therefore a much more subjective assessment parameter than the fair value. The fair value, on the other hand, is an (actual or fictitious) objective market or current value , the determination of which must be abstracted from the specific circumstances of the company and based on general market conditions. This is where the fair value differs from the (internal) value in use .

Individual evidence

  1. ↑ Wolfgang Ballwieser / Frank Zonen / Sven Hayn / Volker H. Peemöller / Lothar Schruff / Claus-Peter Weber (eds.), Handbook IFRS 2011 , 2011, p. 400.