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 residual 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 residual 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 residual value. It is also called the salvage value or scrap value. See also:
Absolute Physical Life,
Obsolescence.
A
fee paid to an actor or other performer for a rerun of a program in which he/she was part of the cast. An
advertiser or a broadcaster may pay the fee, which is set in a
union contract. It is also called a residual fee.