residual value


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Residual value

Usually refers to the value of a lessor's property at the time the lease expires.

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.

residual value

The price at which a fixed asset is expected to be sold at the end of its useful life. Residual value is used in calculating some types of depreciation. Also called salvage value, scrap value.

residual value

or

scrap value

the amount for which a FIXED ASSET can be sold at the end of its useful working life. The anticipated residual value is taken into account in calculating the amount of DEPRECIATION to be charged against PROFITS each year for the use of the asset during its life. In many cases residual values are assumed to be nil, given the small residual values of many fixed assets and the difficulties of forecasting what such values may be many years ahead.
References in periodicals archive ?
This increase in residual values has made a positive contribution to the X-Trail's whole-life costs, with the new version 10% less to run on a pence-per-mile basis when compared with the outgoing model.
With the residual value of a car reflecting how well a model holds its value, the ALG award is a clear indication that consumers and experts alike recognise the high levels of quality offered by the all-new SUV.
FASTFACTS HPI's top ten convertibles by residual value Audi TT Roadster Audi A3 Cabriolet MINI Convertible (New) BMW 3 SERIES Convertible BMW 1 SERIES Convertible BMW Z4 Coupe Cabrio Mercedes SLK Porche BOXSTER Audi A5 Convertible Jaguar XK Convertible
Illustrations 8 and 9 involve a member's reliance on assumptions about residual value in equipment leasing transactions.
Under the relevant tax law, the tax consequences of a leasing transaction depend on whether the property to be leased is reasonably expected to have a residual value of 15 percent of its value at the beginning of the lease.
IFRS makes constant reference to value: recoverable value, residual value, fair value, useful value.
com will offer a suite of risk management tools to aid aircraft and aircraft component manufacturers, aircraft leasing companies, and financial institutions in the analysis and measurement of risk related to asset and residual value guarantees, aircraft leasing, securities, and manufacturer-contingent liability portfolios.
The residual value is the projected value of the vehicle at the end of the lease term.
That's the difference between the residual value (what the car is worth at lease end) and the net capitalized cost (what you pay for the car).
Because a typical vehicle will have a useful life of five or more years, there is a substantial residual value at the end of the lease, often around 50 percent of the vehicle's original cost.
It examines the following: * the annual projected after-tax cash flows the foundry will generate; * the cash flows discounted at an appropriate rate of return, taking into account the relative risk of not realizing the projected cash flow and the time value of encumbered funds; * the estimated residual value of the asset at the end of its remaining useful life; * the residual value converted to its present value equivalent; * the present value of the after-tax cash flow combined with the present value of the determined residual.
Overall, credit enhancement is sufficient to support Fitch's 'AAsf' stressed credit loss and stressed residual value loss expectations.