Accounting
Salvage Value
131 views
Salvage value — also called residual value — is what an asset will be worth at the end of its useful life after full depreciation.
For example, a company buys a truck for $50,000 with a 10-year life. If salvage value is $5,000 the company depreciates $45,000 over 10 years ($4,500/year straight-line).
Salvage value affects how much depreciation expense is recorded each year, impacting reported profit and tax liability.