Salvage Value

[SAL-vij VAL-yoo]

What is the definition of Salvage Value?

The estimated resale value assigned to an asset at the end of its useful life, often used in calculating depreciation of fixed assets.

Using Salvage Value in an Example

In calculating depreciation for a piece of machinery, a company estimates that after 10 years of use, the machinery will have a salvage value of $5,000. This estimated salvage value is then used to determine the annual depreciation expense for the machinery.

Using Salvage Value in a sentence

We need to assess the salvage value of our old printing equipment before we can finalize our financial statements for the year.

Related Terms

Surviving Spouse

A person whose spouse has died within the tax year and who may file a joint tax return for that year. Additionally, the surviving spouse can file joint returns for the next two years if they remain unmarried and maintain a household as the principal residence for a dependent child.

Learn More

Swap

A financial contract in which two parties agree to exchange streams of payments over a specified period, based on different indices such as interest rates, foreign exchange rates, or equity indices, applied to a notional amount. Swaps typically do not involve the exchange of principal.

Learn More