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This salvage value template shows the calculation of the salvage value of equipment.
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Salvage value is the estimated amount that an asset is worth at the end of its useful life. It is also known as scrap value or residual value and is used to determine the annual depreciation of an asset.
The Internal Revenue Service (IRS) requires companies to estimate a “reasonable” salvage value. The value depends on how long the company expects to use the asset and how hard the asset is used. For example, if a company sells an asset before its useful life, a higher value can be justified. Typically, companies would set a salvage value of zero on assets that are used for a long time and are inexpensive (5-year-old printer, 4-year-old laptop, etc.).
The estimated salvage value is deducted from the cost of the asset to determine the total amount that is depreciable on an asset.
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Below is a break down of subject weightings in the FMVA® financial analyst program. As you can see there is a heavy focus on financial modeling, finance, Excel, business valuation, budgeting/forecasting, PowerPoint presentations, accounting and business strategy.
A well rounded financial analyst possesses all of the above skills!
Additional Questions & Answers
CFI is the global institution behind the financial modeling and valuation analyst FMVA® Designation. CFI is on a mission to enable anyone to be a great financial analyst and have a great career path. In order to help you advance your career, CFI has compiled many resources to assist you along the path.
In order to become a great financial analyst, here are some more questions and answers for you to discover:
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