  We report the Standard Model evaluation of the indirect CP violation
parameter $\varepsilon_K$ using inputs determined from lattice QCD: the kaon
bag parameter $\hat{B}_K$, $\xi_0$, $|V_{us}|$ from the $K_{\ell 3}$ and
$K_{\mu 2}$ decays, and $|V_{cb}|$ from the axial current form factor for the
exclusive decay $\bar{B} \to D^* \ell \bar{\nu}$ at zero-recoil. The
theoretical expression for $\varepsilon_K$ is thoroughly reviewed to give an
estimate of the size of the neglected corrections, including long distance
effects. The Wolfenstein parametrization $(|V_{cb}|, \lambda, \bar{\rho},
\bar{\eta})$ is adopted for CKM matrix elements which enter through the short
distance contribution of the box diagrams. For the central value, we take the
Unitarity Triangle apex $(\bar{\rho}, \bar{\eta})$ from the angle-only fit of
the UTfit collaboration and use $V_{us}$ as an independent input to fix
$\lambda$. We find that the Standard Model prediction of $\varepsilon_K$ with
exclusive $V_{cb}$ (lattice QCD results) is lower than the experimental value
by $3.4\sigma$. However, with inclusive $V_{cb}$ (results of the heavy quark
expansion), there is no gap between the Standard Model prediction of
$\varepsilon_K$ and its experimental value. For the calculation of
$\varepsilon_K$, we perform the renormalization group running to obtain
$\eta_{cc}$ at next-to-next-to-leading-order; we find
$\eta_{cc}^\mathrm{NNLO}=1.72(27)$.
