What is Present Value?
Present Value The current worth of a future sum of money or stream of cash flows discounted at a specified rate, used extensively in valuation, investment analysis, and accounting under IFRS and US GAAP.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Present Value” Used in Practice?
The present value of future lease payments must be calculated and recognized as a liability on the balance sheet under IFRS 16.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Present Value?
The current worth of a future sum of money or stream of cash flows discounted at a specified rate, used extensively in valuation, investment analysis, and accounting under IFRS and US GAAP.
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