1. What is Salvage Value?

Salvage value is the estimated resale value of an asset at the end of its useful life. It represents how much the asset will be worth after accounting for depreciation over time.

2. How Does the Calculator Work?

The calculator uses the salvage value formula:

Where:

• Original Cost — The initial purchase price of the asset
• Accumulated Depreciation — Total depreciation charged against the asset over its useful life

Explanation: The formula calculates the remaining value of an asset after accounting for all depreciation expenses.

3. Importance of Salvage Value

Details: Salvage value is important for financial reporting, tax calculations, and capital budgeting decisions. It helps businesses determine depreciation expenses and plan for asset replacement.

4. Using the Calculator

Tips: Enter the original cost and accumulated depreciation in USD. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How is salvage value different from scrap value?
A: Salvage value is the estimated resale value, while scrap value is what the asset would be worth if sold for parts or materials.

Q2: Can salvage value be zero?
A: Yes, if an asset has no remaining value at the end of its useful life, the salvage value can be zero.

Q3: How does salvage value affect depreciation?
A: Salvage value is subtracted from the original cost to determine the total amount that will be depreciated over the asset's life.

Q4: Is salvage value the same as book value?
A: No, book value is original cost minus accumulated depreciation at any point in time, while salvage value is the estimated end-of-life value.

Q5: How often should salvage value be reassessed?
A: Salvage value should be reviewed annually and adjusted if market conditions or asset usefulness changes significantly.