Net salvage value

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Net salvage value

The after-tax net cash flow for terminating the project.

Net Salvage Value

In accounting, an estimate of the after-tax value of an asset at the end of its depreciation. For example, a firm's computer depreciates each year. When it breaks down or becomes obsolete, it has a net salvage value; it is calculated by the best guess of the net cash inflow when it is sold at the end of its life after taxes.

In price regulated industries, the salvage value may be a negative value because it includes the net cash outflow in removing the asset from where it was used. For example, nuclear energy plants must store the nuclear waste at the end of their useful life. This cost is a contributing factor in the salvage value. In such a case, the net salvage value is zero. See also: Absolute physical life, Obsolescence.
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The following table presents the estimated future asset retirement obligations and estimated net salvage values at various discount rates:
2 The Supervisory Committee considered that such changes in the estimated useful lives and estimated net salvage values of the fixed assets were made pursuant to the accounting standards of other enterprises in the industry in combination with the actual situation of the Company.