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Salvage Value


For an asset (typically a tangible asset), it is the estimated proceeds from disposal of the asset less all relating costs- that is, all the costs incurred in the process of sale or disposal. Salvage value is not part of the depreciation basis of an asset because a disposing entity would recover this value through the actual proceeds at the time of sale.

Salvage value can be also defined as the book value of an asset less its accumulated depreciation at the end of its useful life (at a time that depreciation would have completed and useful life is zero).

This value is also known as residual value or scrap value.



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