CERTYNEX IFRS ACADEMY

The subsidiary Verrania sells its entire output of flat glass to another unit of the group, at an internal transfer price below the prices on the active market for this glass. To estimate the value in use of Verrania's CGU, which selling prices does the entity use in the cash flow projections?

The internal transfer prices actually invoiced, since they correspond to the unit's actual cash receipts.

Management's best estimate of future arm's length prices.

The market price observed at the reporting date, held unchanged over the whole projection period, whatever the expected developments.

The average of the internal transfer price and the market price, so as to neutralise the effect on the group.