Consider the following statements regarding the calculation of ‘recoverable amount’ in context of IAS 36 Impairment of assets:

1. ‘Value in use’ reflects the present value of the net cash flows from using the asset whereas ‘fair value less cost of disposal’ reflects the present value of the net cash flows from selling the asset.

2. When calculating the value in use of an asset, we should never include cash flows that are based on projections that exceed a 5-year period.

3. When calculating value in use, we must use a pre-tax discount rate.