In the asset management of enterprises, the estimated net residual value ratio is a very important indicator, which can help enterprises better evaluate the value and useful life of assets, so as to better manage assets and make decisions. So, what is the estimated net residual value rate? How is it calculated? This article will give you a detailed introduction.
The estimated net residual value ratio is the ratio of the estimated residual value of the asset to its original value at the end of its useful life. Projected residual value refers to the amount that an enterprise currently receives from the disposal of an asset after deducting the estimated disposal costs, assuming that the asset is expected to have reached the end of its useful life and is in the expected state at the end of its useful life. The estimated net residual value rate reflects the degree of depreciation and salvage** capacity of the asset, and generally the higher the better.
The determination of the estimated net residual value rate shall be based on the nature and use of the asset, a reasonable estimate of the useful life of the asset, the estimated salvage value and the estimated disposal cost, as well as the impact of technological progress, market changes, policies and regulations and other factors of the asset. Once the estimated net residual value rate is determined, it cannot be arbitrarily changed, unless there is a significant change in the useful life and estimated residual value of the asset, which requires the treatment of a change in accounting estimates.
The estimated net residual value rate is calculated as:
Estimated net residual value rate = estimated residual value Original value 100%.
The estimated residual value is equal to the estimated residual value minus the estimated disposal costs, and the original value is equal to the acquisition cost of the asset or the fair value at the time of use. The calculation of the estimated net residual value rate is generally carried out when the asset increases or decreases, so as to determine the depreciation base and depreciation method of the asset.
There are generally the following methods to determine the estimated net residual value rate:
In accordance with the regulations or practices of the country or industry, a fixed ratio, such as 5% or 10%, is determined.
Based on the actual use of the asset and the market**, with reference to the disposal of similar assets**, a reasonable amount is determined.
According to the change law of the expected useful life and estimated residual value of the asset, mathematical models, such as linear regression, exponential smoothing, etc., are used to carry out ** and fitting.
The estimated net residual value rate is an important indicator of the value and useful life of an asset, which can affect the depreciation calculation of the asset and the net value assessment of the asset. Therefore, enterprises should reasonably determine the estimated net residual value rate according to the nature and use of assets, and review and adjust them according to the actual situation to improve the efficiency and effectiveness of asset management. This article introduces the concept and calculation method of the estimated net residual value rate, I hope it will be helpful to you.