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What is salvage value?

Salvage value is the estimated amount that an organization’s fixed assets will have at the end of its useful life. Think of this as the scrap left over that the company can sell if they wanted to. Salvage value will be applied to each depreciation method with the exception of the declining balance method.

For example, if a company owns a tractor and the net book value is $0 (i.e. fully depreciated), and then they sell it for $20, that is considered the salvage value.


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