CERTYNEX IFRS ACADEMY

Mirabel has decided to sell a disused warehouse: the sale is expected within a few months and the warehouse no longer generates operating cash flows. There is no indication that its value in use materially exceeds its fair value less costs of disposal. Which approach is appropriate for determining its recoverable amount?

Use fair value less costs of disposal, since value in use consists mainly of the net disposal proceeds.

Use the historical acquisition cost of the warehouse.

Use the expected selling price, without deducting costs of disposal.

Necessarily build a full five-year value in use model, then use the lower of the two amounts obtained.