The present value of expected cash flows that an entity expects to incur to satisfy a liability is referred to as the:value-in-usefulfilment valuemarket valuecurrent value
Question
The present value of expected cash flows that an entity expects to incur to satisfy a liability is referred to as the:value-in-usefulfilment valuemarket valuecurrent value
Solution
The present value of expected cash flows that an entity expects to incur to satisfy a liability is referred to as the:
- Fulfilment value.
The fulfilment value is a concept used in financial accounting and reporting. It represents the present value of the cash, or other financial resources, that an entity expects to expend to settle a liability. This includes not only the principal amount of the liability, but also any interest or other costs that the entity expects to incur in the process of settling the liability.
Value-in-use refers to the net present value of cash flows expected to be generated by an asset. Market value is the price at which an asset or liability would trade in a competitive auction setting. Current value is a broad term that could refer to the current market value, book value, or some other measure of value of an asset or liability.
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