What Is a Discounted Future Value?

The present value of future cash flow is the basis for forming a fair value.

Present value of future cash flows

The British ASB published a research report titled "Discounting in Financial Reporting" in 1997; in the same year, the FASB in the United States also released the title "Using Cash Flow Information on Accounting Measurement); 1998

This part of the information is most likely to convey the private information held by the management of the enterprise to the users of the financial statements, but at the same time it leaves a lot of room for manipulation by the management, and it is difficult for such manipulation to be found and verified independently by external users. Therefore, some items in the financial statements are best reflected by historical cost measurement attributes, such as inventory and long-term equity investment; some items can be reflected by market prices, such as short-term financial assets and financial liabilities in active markets; some items can be At the same time, reveal the company's unique value information, such as intangible assets and the company's unique operating assets, that is, use multi-dimensional measurement attributes to disclose relevant and reliable financial information.