(Historic Value) ^ (1 + Present Value)
The 90`s and the beginning new century XXI accounting records probably didn't have or didn't take the importance that in our nowadays have the present value, not only in accounting books but also when we take a decision. The present value definition is to discount the implicit rate of future cash flows and get an interest free value, compare it with other options and take the decision with most economic value added for the company. The issue is where we can find the rate (%) or how we can work out it. The choice or work out the rate will depend on the business kind and the cash flow magnitude. The banks are an important fount to get one because they evaluate our capacity to generate a positive cash flow, in addition, we can find tools like the IRR that allow us to work out a future cash flows internal rate of return and compare it with the initial investment.
Nowadays the work out to get a present value are being used in new accounting policies for preparing the financial information, the idea is clean the historic value of accounting, which is defined as keeping the initial records value without modification, This will help in presenting the real financial situation of the company, recognizing assets, interest, and liabilities to fair value.
Some examples of it (1) Financial Leasing (2) Closing Plan studies (3) right-of-use lease assets.