Definition of salvage value according to the new accounting frameworks

Juan David Maya, public accountant, teacher and consultant in International Financial Reporting Standards, clarifies that in the new accounting frameworks the salvage value is not mentioned, since this issue, which was something that was mentioned in the Tax Statute in the decade of the 80s, it is no longer in force.

However, in this regard, the new accounting frameworks began to speak of the residual value of an asset . In this sense, the purpose of calculating the residual value is that the assets are not depreciated in their entirety, because if that happens and then the asset is sold, such a situation generates an impact on equity that is called sales earnings and disposition of assets, which slightly distorts the results of the entity.

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