What is residual value in SAP FI-AF-SAI - Simplified Accounting Integration?

SAP Term: residual value

• Component: FI-AF-SAI

• Component Name: Simplified Accounting Integration

• Description: In the area of leasing, the estimated value of a leased object at a future point in time. In a leasing contract, the residual value is usually the value at the end of the leasing contract. The estimation of the residual value usually is based on: Base price of the lease object Lease term and the usage of the object during this term Decrease of value of similar objects The value of an object usually decreases during its useful life. In the area of leasing, two types of residual value are usually relevant: Guaranteed residual value is the residual value agreed between lessor and lessee and will also be the purchase option price on the contract end date. Unguaranteed residual value is the estimated fair market value on the contract end date.

Smart SAP Assistant

• Key Concepts: 
  Residual value is a term used in SAP's FI-AF-SAI Simplified Accounting Integration component. It is the estimated value of an asset at the end of its useful life. This value is used to calculate the depreciation of an asset over its useful life. 
  
  How to use it: 
  In SAP, residual value is used to calculate the depreciation of an asset over its useful life. This value is entered into the system when an asset is created and can be adjusted as needed. The depreciation of an asset is calculated by subtracting the residual value from the original cost of the asset and dividing it by the number of years in its useful life. 
  
  Tips & Tricks: 
  When entering a residual value into SAP, it is important to consider the estimated market value of the asset at the end of its useful life. This will ensure that the depreciation calculation is accurate and that the asset will not be overvalued or undervalued on financial statements. 
  
  Related Information: 
  The residual value of an asset can also be used to calculate its book value. Book value is calculated by subtracting accumulated depreciation from the original cost of an asset. This calculation can be used to determine whether an asset should be sold or kept on a company's balance sheet.