How to Find Salvage Value with the Straight-Line Method
- 1). Research the fixed asset provider's guidelines for both useful life and salvage value. Each manufacturer of fixed assets often provides information for these two figures. Accountants can use the suggested salvage value for an asset.
- 2). Review current generally accepted accounting principles or Internal Revenue Service guidelines for straight-line depreciation. Both GAAP and the IRS group fixed assets into specific categories. Each group includes a salvage value for assets within the category. Accountants will typically use these when available.
- 3). Estimate the asset's salvage value based on the items useful life and potential market value. For special fixed assets, a small market often exists for these items. The absence of standard salvage values require accountants to look at what current assets sell for at the expected age of the asset. This estimate then represents the asset's salvage value.
