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Recoverable amount is the higher of an asset's fair value less costs to sell and its value in use.
According to IAS, recoverable amount of an asset is the maximum of:
1)the asset's fair value (its selling price)
2) the asset's value in use. The value in use of an asset is the sum of the discounted cash flows derived from the asset.
Recoverable amount of an asset, also called realizable value; equals to, assets fair value less costs to sell or usability value whichever is less;
Usability value equals to the current valu future cash flows expected to be occur from the asset or cash-generating unit.
the Recoverable Amount :
its used when you recognise any impairment test for your assets .
you must compare the carrying amount ( amount of asset recorded in statement in financial position ) with the recoverable amount which is under IFRS ( The Higher of A) Fair Value Of Net Selling Price OR B) Value In Use )
Value In Use : mean ( the Discounted Net Cash Flow ( Inflow Or Outflow ) Generated from the use of asset after substracting any Disposal Value At the end of Life .
