Asked by bryan chavez on Jun 20, 2024
Verified
Salvage value is:
A) Not a factor relevant to determining depletion.
B) A factor relevant to amortizing an intangible asset with an indefinite life.
C) An estimate of the asset's value at the end of its benefit period.
D) A factor relevant to determining depreciation under MACRS.
E) A factor relevant to determining an asset's useful life.
Salvage Value
The anticipated market value of an asset at the conclusion of its operational lifespan.
Asset's Value
The monetary worth assigned to an asset, based on factors like market value, cost, and depreciation.
Benefit Period
The duration during which benefits, such as those from an insurance policy or investment, are paid out.
- Understand the definition and accounting treatment of salvage value in asset depreciation.
Verified Answer
CQ
Claudia QuezadaJun 22, 2024
Final Answer :
C
Explanation :
Salvage value refers to the estimated value of an asset at the end of its useful life or benefit period. This is relevant in determining the depreciation expense for tax purposes as well as the net book value of the asset on the balance sheet.
Learning Objectives
- Understand the definition and accounting treatment of salvage value in asset depreciation.