Editing Residual value (section)

{{Short description|Future value of a good in terms of absolute value}}
'''Residual value''' also known as '''salvage value''' describes the [[future value]] of a good in terms of absolute value in monetary terms after depreciation, and it is sometimes abbreviated into a percentage of the initial price when the item was new. It is one of the constituents of a [[leasing]] calculation or operation and is a key concept in accounting. It represents the amount of value that the owner of an asset can expect to obtain when the asset of its lease or when it reaches the end of its useful life.<ref>{{cite web |url=https://www.accountingtools.com/articles/the-residual-value-calculation.html |title=Residual Value |date=September 1, 2024 |publisher=Accounting Tools }}</ref><ref>{{cite web |url=https://www.securitisation.com.au/resources/glossary/residual-value |title=Residual Value |publisher=Australian Securitisation Forum |access-date=November 2, 2024 }}</ref>

Example: A car is sold at a list price of $20,000 today. After a usage of 36 months and 50,000 miles (ca. 80,467 km) its value is contractually defined as $10,000 or 50%. The credited amount, on which the interest is applied, thus is $20,000 present value minus the present value of $10,000 future value.<ref>{{cite web |url=https://www.caranddriver.com/auto-loans/a43168092/residual-value-lease/ |title=What Is Residual Value? |date=July 13, 2023 |publisher=Car and Driver }}</ref>