The estimated worth of an asset after it has fully depreciated or deteriorated beyond further use. It's also known as the salvage value of an asset. Residual value is based on what a company expects to receive from selling or disposing of the asset at the end of its useful life. For example, the residual value of a car is calculated based on market comparisons and sales data.
The key issue with residual value is how to estimate the amount that will be obtained from an asset as of a future date. Different industries and fields may use residual value differently.