Accounting Dictionary

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Residual Value

Definition: Under international financial reporting standards, an asset's residual value is the estimated amount that the owner currently would obtain by disposing of the asset, less any disposal cost, assuming that the asset is of the expected age and condition at the end of its useful life.

Review the residual value of an asset at least at the end of each fiscal year. If the estimate changes, then account for it as a change in accounting estimate.