Value in Use is defined as:

• A. The present value of future cash flows expected from continuing to use the asset
• B. The fair value less costs to sell
• C. The asset's net realizable value
• D. The asset's current replacement cost

Answer: (A)

Value in use represents the value of an asset to the business from its ongoing use. It is the present value of the future cash flows the asset is expected to generate while being used in its current manner (and, for impairment purposes, including the disposal cash flows at the end of its life), all discounted to today. This measure is used in impairment testing to compare with the asset’s carrying amount to determine the recoverable amount. The other concepts describe different measurements: fair value less costs to sell reflects what you could obtain from selling the asset, net realizable value relates to inventories and eventual recovery, and current replacement cost is what it would cost to replace the asset today. Thus, the definition that matches is the present value of future cash flows from continuing to use the asset.