CERTYNEX IFRS ACADEMY

Nalvière, whose functional currency is the euro, is estimating the value in use of a mine operated by its Brazilian branch, whose cash flows are in reais. Which method complies with IAS 36?

Translate each annual cash flow into euros at the forecast exchange rate for the year concerned, then discount the total at the euro rate.

Discount the cash flows in reais at a rate specific to the real, then translate the present value at the spot rate at the date of the calculation.

Discount the cash flows in reais at the euro rate, since value in use is presented in the functional currency.

Discount the cash flows in reais at a rate specific to the real, then translate the present value at the average rate for the year.