Salvage Value

Definition

The estimated resale or scrap value of a tangible asset at the end of its useful life. Excluded from the depreciable base — you only depreciate the value you'll actually consume.

Formula

Depreciable base = Cost - Salvage value

Worked Example

Server cost $9,600, expected resale after 4 years $600:

Depreciable base = $9,000
Annual depreciation = $9,000 / 4 = $2,250 (not $2,400)

Interpretation & Pitfalls

Intangibles almost always have zero salvage. For hardware, be conservative: used-equipment markets move fast.

In TupicFinance

Salvage is an input on fixed-asset records and shapes the generated schedule.