What is the difference between salvage value and scrap value?

Question

Which one should be consider while evaluating fixed assets value ?

Rehan Qureshi · Answer

Residual value, salvage value and scrap value are three terms that refer to the expected value at the end of the useful life of the property, plant and equipment used in a business. This estimated amount is used in the calculation of an asset's depreciation expense, and often the amount is assumed to be zero.The term residual value can also refer to the estimated value of a leased asset at the end of the lease term. In financial accounting, scrap value is associated with the depreciation of assets used in a business. In this situation, scrap value is defined as the expected or estimated value of the asset at the end of its useful life. Scrap value is also referred to as an asset's salvage value or residual value. The following example illustrates how the scrap value is used. A business acquires equipment at a cost of $150,000 and estimates that its scrap value will be $10,000 at the end of its useful life of7 years. The annual straight-line depreciation expense will be $20,000 [($150,000 cost minus $10,000 scrap value) divided by7 years]. Accountants and U.S. income tax regulations often assume that for the depreciation calculation the asset will have no scrap value. (If cash is received when the asset is scrapped, any amount that is in excess of the asset's carrying value will be reported as a gain.)

In cost accounting, scrap value often refers to the amount that a manufacturer will receive from materials or products that will be scrapped.

mohamed mansour · Answer

Residual value, salvage value and scrap value are three terms that refer to the expected value at the end of the useful life of the property, plant and equipment used in a business. This estimated amount is used in the calculation of an asset’s depreciation expense, and often the amount is assumed to be zero.

The term residual value can also refer to the estimated value of a leased asset at the end of the lease term.

haytham laag · Answer

i think they r the same

Prince Ninan · Answer

Both are same

Nasir Hussain Kumbhar · Answer

Both selvage value and scrap value means the same..

Ranganath Rangaiah · Answer

salvage value and scrap value are terms that refer to the expected value at the end of the useful life of the equipment used in a business. This estimated amount is used in the calculation of an asset’s depreciation expense, and often the amount is assumed to be zero.

Menerva Melad · Answer

Salvage value is defined as the value of the product after its useful life .In other words it is the value after depreciation.

Salvage value also known as scrap value.

Niranjan Singh · Answer

Salvage Value = what you can sell it for now (as is)

Scrap Value = purchase price - depreciation

FAREEHA ASIF · Answer

Salvage value or Scrap value both are same. And its a value of a fixed asset after its useful life..

Fraz Mehmood · Answer

there is no diff b/w salvage and scrape value

Edna Jasmin · Answer

Salvage Value or Scrap Value is the the value of Fixed Assets after its useful life. This is oftentimes zero. There is no difference.

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What is the difference between salvage value and scrap value?

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