This salvage value template shows the calculation of salvage value of an equipment.
Here is what the salvage value template looks like:
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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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