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Residual 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 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.




(1) An amount remaining from an investment after payment of all operating expenses, debt service, reserve funds, and income taxes. The residual remains for payment to the investor.

(2) The value of leased personal property at the end of the lease term. Under an operating lease, a lessee may be given the right to purchase the property for the previously agreed upon residual value.Car leases,copier leases,and heavy equipment leases all work on this principle.

References in periodicals archive ?
We believe Residual Value remains the best metric for evaluating the overall strength of an automotive brand, and we congratulate Audi for the proven success of their brand and S5 model," said James Clark, General Manager of ALG.
said in a statement that it stands by its decision to go with the existing residual formula.
These constituents include residual lignin, extractives, HexA, and other components.
At the end of the 20-year sublease primary term, X will have either the proceeds of the fixed-payment option or a headlease residual that has a FMV approximately equal to the proceeds of the fixed-payment option.
Starting late last year, auto lease ABS residual realizations began to improve, a trend that has continued into 2010.
Ford Motor Company vehicles, bolstered by improved quality, fuel economy and popular redesigned models, recorded the largest increase in residual values from the 2009 to the 2010 model year among full-line manufacturers.
Acquisition and disposal of 70 000 t / a of residual waste from the districts Storman and Lauenburg from 1.
Toyota's 60-month average residual value improved 2.
Nothing is straightforward about any residual calculations.
Abstract: The main aim is to assess the contribution of surface layers of alloy AlZn5Mg2Cu1 by determining the value and type of residual stress under the surface finish.
Summary: Residual fuel cracks have strengthened a lot since 3Q08.