Torvane's demand deposit must be repaid at the earliest in 2 years for 1,210,000 (first possible demand date); discount rate 10% (case data). A valuation technique gives 940,000. Compute the discounted demand amount and then the fair value of the financial liability.
- Amount payable on the first date
- 1,210,000
- Years to the first demand date
- 2
- Discount rate
- 10 %
- Result of the valuation technique
- 940,000