The document defines and provides an example of salvage value. Salvage value is the estimated resale value of an asset at the end of its useful life, such as when a company sells a delivery car for $1,500 after 5 years of use. Salvage value is not discounted to present value and is also sometimes called scrap value. The document uses the example of a company purchasing a delivery car for $10,000 that is resold for $1,500 after 5 years of use to illustrate how salvage value applies.

1. MD.Tuhin Parves
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2. The estimated value that the owner is paid when the
item is sold at the end of its useful life/The estimated
resale value of an asset at the end of its useful life.
 Salvage value is not discounted to its present value.
 Salvage value is also known as scrap value.
Salvage Value?

3. Suppose , a company purchases a delivery
car for $10,000 and estimates its useful life to
be five years. It uses the car for five years
and sells it to a used car lot for $1,500.
Here,($1,500) would be the Scrap or salvage
value.

4. But what if……..?

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