The value of an asset or a group of assets or a project if the asset(s) or the project’s assets were sold or disposed of. It may also refer to an asset’s opportunity value had it been used differently or in another process or unit of production, etc., in the entity.
Abandonment would be an option for an entity contemplating whether to continue or discontinue a project: a comparison is usually made between two variables, namely the salvage value of a project and the net present value (NPV) of its expected cash flows. If the salvage value is greater than NPV, the project would be abandoned as it adds no value to is owner.
It is also known as liquidation value of an asset.
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