fair value and discounted rate

[rfebrian91]

Dear Masters,

I wanna ask about how to measure fair value of monetary asset with discounted cashflow method. In chase if i have monetary asset in foreign currency then i convert it to functional currency, what's discounted rate should be used to measure present value of the asset?

and where i can find the written rules which tell about it?

Thank you

 

[ICAEW]

If you're going to be discounting to get the present value of the cash flows,you'll need to know the cost of capital of the company. Once you have that, then convert the asset first and then discount it to the present value.

I'd suggest looking up financial management techniques in case you need help with finding out the discount rate.

 

[Counterofbeans]

See my reply in the technical part of this website

 

[Ameen Ahmed]

discount your value using effective market rate