• Salvage value is the book value of an asset after all depreciation has been fully expensed.
• The salvage value of an asset is based on what a company expects to receive in exchange for selling or parting out the asset at the end of its useful life.
• Companies may depreciate their assets fully to $0 because the salvage value is so minimal.
• Salvage value will influence the total depreciable amount a company uses in its depreciation schedule.
• A company may calculate salvage value by taking a percentage of the cost, working with an appraiser, or relying on historical data.
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• 1. What is salvage value in accounting, and how is it calculated? 
• 2. What factors determine the value of an asset's salvage value? 
• 3. Why is salvage value important in determining the depreciation of an asset? 
• 4. How is salvage value accounted for in financial statements? 
• 5. How does salvage value affect a company's tax liability? 
• 6. What is the difference between salvage value and scrap value of an asset? 
• 7. How is salvage value affected by the useful life of an asset? 
• 8. What is the relationship between salvage value and depreciation expense? 
• 9. How does the method of depreciation used affect salvage value? 
• 10. How is the market value of an asset used to determine its salvage value? 
• 11. Can the salvage value of an asset change over time? 
• 12. What is the impact of incorrect salvage value estimation on financial statements?
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