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What is the meaning of Scrap Value in accounting?

scrap value is the residual value of an asset. the valu of an asset which exists after its estimated life period


is this true Residual value means the actual cash one receives at end of life of asset?

Residual value is the value of the asset that they are likely to recover at the end of the life of the asset. It is the value that is expected to be at the end. But its not necessarily that we realise the amount at the end of the period. It can be more or less than that.


What is cost plus residual value?

The residual value of "cost plus" is whatever is charged which exceeds the cost. Example: I provide a quote the terms for a project as being "cost plus 20%". If the cost for my project is $100, then I would bill $120. The residual value is $20.


What is the estimated salvage value of a fixed asset?

1. Estimated salvage value is the amount which is expected to be received from disposal of fully depreciated asset after useful life of asset.


Should you deduct resale value of an asset when calculating straight line depreciation?

Yes you should. That is also known as the residual value and you would minus that from cost and divide by the useful economic lifetime if the asset.


In Accounting what does Residual value mean?

Residual value estimates how much an asset is worth at the end of its productive life. This value is calculated by the lending institution prior to a lease or loan on an item. It is based on past and future predictions and is the key way of determining a payment schedule.


Can an asset be depreciated to the point where its value becomes negative?

That can never happen. An asset will either be depreciated to its salvage value, or to zero, depending on whether or not it has a salvage value.


Account depreciation reducing balance method find how to rate?

rate = 1 - (n * by the square root of R /C) * 100% Where: n = the number of years of useful life of the asset - R= the estimated residual value of the asset C= the cost of the asset


Formula for depreciable cost?

Depreciable cost is calculated by subtracting the salvage value of an asset from its original cost. The formula for depreciable cost is: Depreciable Cost = Original Cost - Salvage Value. This calculation is used to determine the amount of an asset's cost that can be depreciated over its useful life.


Jan 2 06 K acquired equipment for 260000 The estimated life is 5 yrs or 40000 hrs The residual value is 20000 What is the book value of asset on Dec 31 07 if K uses straight line method of depreciatio?

Value of asset: Cost price - accumulated depreciation annual depreciation = (260000-20000 ) / 5 = 48000 Value of asset = 260000 - (48000 *2) 96000 = 164000


What are the types of depreciation methods?

In financial accounting there are three types of depreciation methods:Straight-line = (cost-residual value)/useful life. This method is used when the asset generates revenues that are equal (or very close to equal) over its useful life.Diminishing balance = (cost-accumulated depreciation)*depreciation rate. This method is used when the asset's revenues decrease over its useful life.Units of production = (cost-residual value)*units used /total life units. This method is used when an asset generates revenues based on its measurable usage.


What are the categories of risks in leasing?

The categories of risks in leasing typically include credit risk (default by lessee), residual value risk (value of asset at end of lease term), operational risk (maintenance and usage), legal and regulatory risk, and market risk (fluctuations in asset value). Each of these risks can impact the financial health and success of the lessor.