valeur d'usage

English translation: Value-In-Use (IAS 36)

GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)

French term or phrase:	valeur d'usage
English translation:	Value-In-Use (IAS 36)
Entered by:	Deb Phillips (X)

23:10 Apr 10, 2004

French to English translations [PRO]
Bus/Financial - Finance (general) / financial transactions

French term or phrase: valeur d'usage

Ces titres font l'objet d'une évaluation en fonction de leur valuer d'usage déterminée notamment en prenant en compte la valeur de marché.

I know this is often translated as "value in use", but I suspect that here in the U.S. equities market it would be called "fair market value". Can anybody confirm that????? Any reliable sources?????

TIA.
msg

Marian Greenfield KudoZ activity Questions: 161 (1 open) (1 without valid answers) (1 closed without grading) Answers: 16321
Local time: 22:59

Value-in-use (VIU) - Not Fair Market

Explanation:
Principally the difference arises in the use of entity-specific information rather than resale value.

What is ‘impairment’?
An asset is described as impaired – and an impairment loss is recognised – to the extent that the asset’s carrying amount exceeds its recoverable amount.

Carrying amount (CA) is the amount at which an asset is recognised in the balance sheet after deducting any accumulated depreciation (amortisation) and accumulated impairment losses thereon.

Recoverable amount (RA) is the higher of an asset’s net selling price and its value in use.

Net selling price (NSP) is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.

Value in use (VIU) is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

IAS 36
www.acca.co.uk/publications/studentaccountant/315710 - 58k - Cached

The following terms are used in this Standard with the meanings
specified:
The recoverable amount of an asset or a cash-generating unit is the
higher of its net selling price and value in use.

Value in use is the present value of the future cash flows expected to
be derived from an asset or cash-generating unit.

Net selling price is the amount obtainable from the sale of an asset or
cash-generating unit in an arm’s length transaction between
knowledgeable, willing parties, less the costs of disposal.

Costs of disposal are incremental costs directly attributable to the
disposal of an asset or cash-generating unit, excluding finance costs
and income tax expense.

An impairment loss is the amount by which the carrying amount of
an asset or a cash-generating unit exceeds its recoverable amount.

Carrying amount is the amount at which an asset is recognised in the
balance sheet after deducting any accumulated depreciation
(amortisation) and accumulated impairment losses thereon.

Depreciation (Amortisation) is the systematic allocation of the
depreciable amount of an asset over its useful life.

Depreciable amount is the cost of an asset, or other amount
substituted for cost in the financial statements, less its residual value.

Useful life is either:

(a) the period of time over which an asset is expected to be used by
the entity; or
(b) the number of production or similar units expected to be
obtained from the asset by the entity.

In the case of an intangible asset, the term ‘amortisation’ is generally used instead of ‘depreciation’.
Both terms have the same meaning.

Invitation to Comment (IAS 36) (PDF)
www.icanz.co.nz/staticcontent/download/AGS/nzias36.pdf - 315k - View as html

43. Fair value differs from value in use, as defined in IAS 36, Impairment of Assets. Fair value reflects knowledge and estimates of participants in the market, as well as factors that are relevant to market participants in general. In contrast, value in use reflects the enterprise’s knowledge and estimates, as well as entity-specific factors that may be specific to the enterprise and that are not applicable to enterprises in general. For example, fair value does not reflect any:

(a) additional value derived from the creation of a portfolio of properties in different locations;
(b) synergies between investment property and other assets;
(c) legal rights or legal restrictions that are specific only to the current owner; and
(d) tax benefits or tax burdens that are specific to the current owner.

International Accounting Standards, Philippines
www.picpa.com.ph/adb/exposure_draft56.htm - 233k - Cached

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Note added at 1 day 52 mins (2004-04-12 00:02:46 GMT)
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In this case, the answer is Value-In-Use, which may be the intrinsic or investment value. (Please see definitions for intrinsic and investment value below). If you have difficulties with links or any other concepts, please email as I am an expert in international accounting. (MBA plus job experience in Europe plus overwhelming interest in accounting)

Book Value– Price of an asset minus accumulated depreciation• Market Value– Price of an asset determined in the market• Intrinsic Value– Present value of the expected cash flows from an asset
www.tpaswim.org/Teaching/511_files/ModelsCh8.pdf - 14k

What is Fair Value, Anyway? (PDF)
© Mercer Capital, 2002Page Page 11 www.mercercapital.comMercer Capital\'s Complimentary Electronic Newsletter Volume 2002, No. ... comments added]Fair market value is the value of ... greater than fair market value.Intrinsic value is often ... valuation literature.Fair Market ValueFair ValueHypothetical willing ...
www.bizval.com/Publications/PrintableVersion/Mercer Capital... - 63k - View as html
What is Fair Value, Anyway?Fair Value as Defined under SFAS 142By Matthew R. Crow, ASA, CFAEvery valuation assignment should begin with a determination of the definition of value, otherwise
known as the standard of value. A standard of value provides guidance about how value is determined
and from what perspective. The most commonly used standard is fair market value, whereas fair value,
investment value, and intrinsic value may be more appropriate. The standard of value invokes a series
of laws, rules, regulations, and a body of literature, all of which can be useful in understanding the
different standards and their relationship to each other.Fair market value, the standard applicable to most tax related matters, and therefore the one with which
most valuation experts are familiar, is defined in Revenue Ruling 59-60 as:…the price at which the property would change hands [in a hypothetical transaction] between a
[hypothetical] willing buyer and a [hypothetical] willing seller when the former is not under any
compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable
knowledge of the relevant facts. [Bracketed comments added]Fair market value is the value of a business interest transacting between hypothetical parties in a
hypothetical transaction. There is no identification of a specific transaction between specific parties. In
essence, it represents exposure of the property to a broad market and should represent a consensus price.
Although fair market value is informative with regard to SFAS 142, two other standards of value,
investment value and intrinsic value, also bear consideration.© Mercer Capital, 2002Page Page 22www.mercercapital.comInvestment value is commonly defined as value to a specific or prospective owner, and can include the
synergies, efficiencies and other enhancing factors that arise from the merger or acquisition of a
business. In other words, the benefits of ownership to a particular purchaser, which may include
enhancements to the previously existing business, influence the determination of investment value. The
investment value of a business, therefore, may be substantially greater than fair market value.Intrinsic value is often defined as the value of a company or an asset based on an underlying perception
of the value. Often, management’s perception that its stock is undervalued is based on a perspective of
intrinsic value relative to market value. Intrinsic value is usually calculated based on a theory or model
such as fundamental analysis. Intrinsic value differs from investment value in that investment value is
particular to a given owner, and intrinsic value is not.

Selected response from:

Deb Phillips (X)

Grading comment

Thanks to all. Very interesting discussion and great references.

Deb, I've just started noticing your postings recently and realized you were well-versed in the area... I specialize in these kinds of translations, but do a lot more Spanish and Portuguese > English than French.

I appreciate all the definitions and info.... going right into my glossary.

Best regards,
msg
4 KudoZ points were awarded for this answer

Summary of answers provided

4 +2

going value

Mary Lalevee

5 +1

Value-in-use (VIU) - Not Fair Market

Deb Phillips (X)

4 +1

value in use

Carole Choquette

long term book value OR underlying [or intrinsic] value

Jane Lamb-Ruiz (X)

practical value

Gert Sass (M.A.)

I would have tended to agree with you

Bourth (X)

Answers

1 hr confidence:

practical value

Explanation:
Only a suggestion, and of course I think you know it. Still I make the suggestion because its terminological counter part "market value" or "commercial value" is also mentioned. Just a first idea ...

Gert Sass (M.A.)
Germany
Local time: 04:59
Works in field
Native speaker of: German

2 hrs confidence:

peer agreement (net): +1

value in use

Explanation:
Dictionnaire de la comptabilité et des disciplines connexes

Fernand Sylvain,C.A. Institut Canadien des Comptables Agréés.....

Their value in use is determined by taking their fair market value into account.

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Note added at 2 hrs 10 mins (2004-04-11 01:21:02 GMT)
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other possibilities:

going concern value

Carole Choquette
Canada
Local time: 22:59
Specializes in field
Native speaker of:

English,

French
PRO pts in category: 8

2 hrs confidence:

I would have tended to agree with you

Explanation:
but after consideration of the following feel that USED APPROPRIATELY (which might not be the case in your text) "valeur d'usage" means something different.

Fair Market Value
The price an item would sell for, assuming the buyer and a seller both have reasonable knowledge and are not under undue pressure. To determine fair market value, it is common to compare other similar properties sold near the same time as your property
[http://moneycentral.msn.com/taxes/glossary/glossary.asp?Term...]

So, how do you define fair market value? Recently, a Glossary of Terms was jointly developed by representatives of the American Institute of CPAs, the American Society of Appraisers, the Canadian Institute of Business Appraisers, the Institute of Business Appraisers, and the National Association of Certified Valuation Analysts. According to that Glossary of Terms, the definition of the term fair market value is as follows:

The price, expressed in terms of cash equivalents, at which a property would change hands between a hypothetical willing and able buyer and a hypothetical willing and able seller, acting at arms length in an open and unrestricted market, when neither is under compulsion to buy nor to sell, and when both have reasonable knowledge of the relevant facts
[http://www.divorcehq.com/articles/fairmarketvalue.html]

Given that there appears to be a distinction between "juste valeur" and "valeur d'usage" - a distinction I'm not sure I appreciate - I would be wary!

e) La juste valeur
La juste valeur d'un placement est le prix auquel celui- ci pourrait être échangé entre un acheteur et un vendeur normalement informés et consentants, dans une transaction équilibrée.
f) La valeur de marché
Il s'agit de sa valeur probable de négociation sur un marché actif et liquide, soit le montant de liquidités qui peut être obtenu de sa vente.
g) La valeur d'usage
La valeur d'usage d'un placement est le prix qu'une personne prudente et avisée, informée de la situation de l'entreprise, accepterait de payer si elle avait à l'acquérir.
h) Risque d'exigibilité des engagements techniques
Il s'agit du risque que l'entreprise d'assurance et/ou de réassurance ne soit plus en mesure d'honorer ses engagements, en cas d'augmentation rapide du rythme de règlement des sinistres et/ou des
rachats, du fait de l'Evaluation de ses placements à ***la valeur d'usage*** et non à la valeur de marché
[www.procomptable.com/normes/NC31.pdf]

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Note added at 2 hrs 49 mins (2004-04-11 01:59:37 GMT)
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Then again:

Fair market value in continued use (value in use) is the fair market value of an item, including installation and the contribution of the item to the operating facility. This value presupposes the continued utilization of the item in conjunction with all other installed items. In practice, it is usually depreciated replacement cost new plus delivery, installation, and other make-ready costs. This is the definition generally used for going-concern asset appraisals and purchase price allocation
[http://www.bvappraisers.org/studyguides/bv201/termsnotinglos...]

However, I don\'t feel that \"value in use\" applies very well to the stock market - certainly not as well as to housing etc. My beaten-up car, for instance, has no real value, but it\'s value in use, to me, is inestimable, since it means I don\'t have to spend a fortune to buy a new one! I suppose the same might be said if holding stocks entitles to holder to get tax benefits, say (?).

My final OPINION is that in your context, \"fair market value\" is a good rendition of \"valeur d\'usage\".

Bourth (X)
Local time: 04:59
Native speaker of:

English
PRO pts in category: 307

8 hrs confidence:

peer agreement (net): +2

going value

Explanation:
According to Christopher Freeland's finance and stock mkt dict.
HTH
Mary

Mary Lalevee
United Kingdom
Local time: 03:59
Native speaker of: English
PRO pts in category: 44

15 hrs confidence:

long term book value OR underlying [or intrinsic] value

Explanation:
valeur vénale or valuer marchande is fair market value...here the iintrinsic value [underlying value] is based on the market value...that's what it is saying...seemingly antithetical but not here

France Telecom/Orange, Marian?

"Mais, dans le camp de FT, ****on estime que la valeur d'usage et la valeur vénale sont deux concepts comptables distincts***. La valeur d'usage est "la valeur que l'entreprise attribue à un actif dans une optique de long terme" alors que la valeur vénale est le prix auquel l'entreprise peut vendre cet actif, c'est-à-dire la valeur de marché. Pour un proche de l'opérateur, "le marché peut avoir sa propre logique et ne pas être en phase avec les dirigeants sur la valeur d'un actif. Si une société veut garder un immeuble, elle le valorisera dans ses comptes en actualisant les loyers futurs estimés. Si elle veut le vendre au cours de l'exercice suivant, elle le valorisera au prix du marché". Au juge de dire si la comptabilité doit ou non se calquer sur les marchés financiers."

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Note added at 15 hrs 33 mins (2004-04-11 14:43:30 GMT)
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valeur de marché is market value NOT fair market value...

Ces titres font l\'objet d\'une évaluation en fonction de leur valuer d\'usage déterminée notamment en prenant en compte la valeur de marché.

These securities [shares] are valued based on their long-term book value by taking into consideration their market value.

Now, it seems to me that long term book value is another way of saying intrinsic value.

Cheers

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Note added at 17 hrs 39 mins (2004-04-11 16:49:49 GMT)
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Your text is contrasting TWO values: the intrinsic to the market value...not fair market value...the underlying to the market value
\\
as in:

\"At the other end of the spectrum are those that believe that stocks do have a value independent of immediate market activity. This is usually referred to as intrinsic value. \"

Jane Lamb-Ruiz (X)
Specializes in field
Native speaker of:

English,

Portuguese
PRO pts in category: 763

3 hrs confidence:

peer agreement (net): +1

Value-in-use (VIU) - Not Fair Market

Deb Phillips (X)
PRO pts in category: 8

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English translation: Value-In-Use (IAS 36)

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