Description
Scrap value is defined as the worth of the individual components of an asset that is no longer considered functional. Individual components are considered valuable if they can be put to use elsewhere. These components may be used as is or need to be refurbished in order to be operational. The scrap value of a component is dependent on the supply and demand for the item. Scrap value is also referred to as salvage value, residual value, or break-up value and is estimated by factoring the initial purchase price of the asset and its depreciation.