Under IFRS, the recoverable amount of an asset is     The higher of an asset’s value in use or its fair value minus costs to sell.     The estimated selling price in the ordinary course of business minus the estimated costs of completion and the estimated costs necessary to make the sale.     The present value of the future cash flows expected to be derived from an asset.     The amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, minus the costs of disposal.

On May 1, Soriano Company reported the following account balances along with their estimated fair values: Carrying Amount $ 245,300 79,200 Fair Value $ 245,300 79,200 505,500 658,000 125,500 875,000 $ 1,325,000 $ 1,488,000 $ 253,000 729,800 Account Receivables Inventory Copyrights Patented technology Total assets Current liabilities Long-term liabilities Common stock Retained earnings $ 253,000 740,000 100,000 232,000 $ 1,325,000 On that day, Zambrano paid cash to acquire all of the assets and liabilities of Soriano, which will cease to exist as a separate entity. To facilitate the merger, Zambrano also paid $100,000 to an investment banking firm. The following information was also available: • Zambrano further agreed to pay an extra $71,200 to the former owners of Soriano only if they meet certain revenue goals during the next two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $35,600. • Soriano has a research and…

Provide a brief explanation of why depreciation of capital assets is considered in determining potential net income from an investment, but not included in determining the net cash flow of an investment.

In determining the value in use, which of the following cash flow is excluded from the computation? I. Income tax receipts or payments. II. Net cash flows received or paid on the disposal of the asset at the end of its useful life in an arm's length transaction which is after using the asset. III. Future costs of improving or enhancing the asset's performance.