Calculating value in use in accordance with IAS 36: linking accounting and finance

The purpose of the study is to provide a framework for defining the ‘‘value in use’’ standard of value as required by IAS (International Accounting Standards) 36. The study provides general principles for an impairment testing framework and outlines impairment issues that arise in valuation practice. In particular, the study explains the problems linked with the definition of value in use and provides a framework enabling to coordinate the IAS requirements and the principle of corporate finance. The study analysez three main ‘‘reconciliation problems’’: 1. how to define the value in use as a standard of value and how choose the correct valuation approach; 2. the role of the financial structure; 3. the role of taxes. The understanding of the relevance and impact of these reconciliation aspects should allow a more consistent application of the standard and a limitation in the possibility of the impairment results ‘‘manipulation’’.