Residual value is the value that is expected to be obtained from disposing of a long-term asset at the end of the asset's useful life. The value of used spare parts resulting from repairs is referred to as the residual value, which is negotiated by both parties. If it is returned to the insured, the insurance company will deduct the residual value when determining the compensation.
General residual value calculation method: original value of fixed assets × residual value rate
The estimated net residual value rate of fixed assets is usually 3%-5%, which can be adjusted according to specific circumstances. .
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Introduction to residual value:
When an enterprise uses fixed assets in the production and operation process and their losses lead to a reduction in value, only a certain residual value remains. The difference between the original value and the residual value is amortized over its useful life and is the depreciation of fixed assets. Determining the depreciation range of fixed assets is the prerequisite for calculating depreciation.
A monetary estimate of the value of capital consumed during the period under consideration. Also called capital consumption allowance in national income accounts. Depreciation of fixed assets refers to the systematic apportionment of accrued depreciation according to a determined method within the service life of fixed assets. Service life refers to the expected life of a fixed asset, or the number of products or services that the fixed asset can produce.
The amount of accrued depreciation refers to the amount after deducting the estimated net salvage value from the original price of the fixed asset for which depreciation is accrued. For fixed assets for which impairment provisions have been made, the cumulative amount of fixed asset impairment provisions that have been made shall also be deducted.
Introduction to the residual value rate:
It is mainly a ratio around fixed assets. It is a comparison made when the fixed assets can no longer be used or need to be calculated. That is, make a summary around the income and expenditure of fixed assets. Divide the current value by the purchase price, then multiply by 100%, which is the calculated residual value rate of fixed assets. For other residual values, please refer to the residual value of fixed assets. Calculation method of value rate.
The residual value of fixed assets refers to the value of residual materials recovered when the fixed assets are scrapped. Mainly refers to the value of parts, scrap materials, etc. that remain for sale or use after the fixed assets have lost their use value and have been dismantled and cleaned up.
Assets are resources formed from past transactions or events, owned or controlled by an enterprise, and expected to bring economic benefits to the enterprise. For example, there are live money such as cash and bank deposits; there are also raw materials, finished products, semi-finished products, fixed assets and other things; and intangible things such as patent rights and trademark rights are also assets, and investments are also assets.
Assets need to be controllable. Things rented from others cannot be counted as one's own assets. Things rented to others, although not in one's hands, are still counted as one's own assets. The asset must be measurable in monetary terms and must be an economic resource. The so-called economic resources are things that can make money. For example, scrapped machinery should not be recorded as assets.
Before January 1, 2008, the state’s regulations on the residual value rate were no less than 5% for domestic-funded enterprises and no less than 10% for foreign-funded enterprises. The new Enterprise Income Tax Law was promulgated on January 1, 2008. After the effective date, the ratio will no longer be rigidly stipulated and will be determined by the enterprise itself.