Liquidation and Recoverable Values

Asset-valuation terms for liquidation value, recoverable amount, residual value, and salvage value.

Liquidation and Recoverable Values covers asset-valuation terms for liquidation value, recoverable amount, residual value, and salvage value.

Use these pages when balance-sheet measures change asset value, downside protection, recoverability, or valuation comparability. It sits inside Liquidation, Residual, Recoverable, and Depreciated Values, so readers can move up when the broader valuation context matters.

Use the table below to choose the narrower valuation branch before relying on a model input, market multiple, forecast, risk premium, price signal, or recommendation.

What This Branch Covers

AreaUse it for
Liquidation ValueEstimated asset-sale proceeds in a wind-down after considering timing, costs, claims, and creditor priority.
Recoverable AmountIAS 36 impairment measure equal to the higher of fair value less costs of disposal and value in use.
Residual ValueNet end-of-life or end-of-term asset value used in depreciation, leasing, and investment appraisal.
Salvage ValueSalvage value is the estimated residual amount an asset may be worth at the end of its useful life.

What to Check

  • Forecast source, valuation date, market data, accounting adjustments, and model version.
  • Cash-flow input, discount rate, multiple, growth assumption, terminal value, balance-sheet adjustment, and scenario range.
  • Comparable set, transaction set, sector, geography, size, leverage, margin profile, and accounting basis.
  • Effect on intrinsic value, relative value, price target, margin of safety, impairment view, deal price, or recommendation.
  • Sensitivity to growth, margins, reinvestment, discount rate, exit multiple, leverage, and market conditions.

Common Mistakes

  • Treating a valuation output as a precise fact instead of a range of estimates.
  • Comparing multiples without normalizing earnings, leverage, accounting policy, growth, and risk.
  • Ignoring valuation date, source quality, cyclicality, nonrecurring items, and sensitivity analysis.
  • Using valuation terminology as personalized investment, tax, legal, or appraisal advice.

Valuation content is educational and does not provide investment, tax, legal, accounting, appraisal, or valuation advice.

In this section

Choose a subsection first. Deeper term pages live inside each subsection, which keeps large topic hubs readable.

Liquidation Value

Liquidation value estimates what assets could realize in a wind-down after considering sale timing, costs, creditor claims, and priority.

Recoverable Amount

Under IAS 36, recoverable amount is the higher of an asset's fair value less costs of disposal and its value in use.

Residual Value

Residual value estimates an asset's net disposal amount at the end of its useful life, lease term, or investment holding period.

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