Salvage Value

Salvage value

Scrap value of plant and equipment.

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salvage value

See residual value.

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Salvage Value

In accounting, an estimate of the 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 salvage value; it is calculated by the best guess of the net cash inflow when it is sold at the end of its life. It will never be above the blue book value.

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. See also: Absolute physical life, Obsolescence.

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Salvage Value

The estimated value that will be realized upon the sale or other disposition of an asset at the end of its useful life.