Jäännösarvo

Jäännösarvo, meaning residual value in English, is a term used in various financial and accounting contexts. It refers to the estimated worth of an asset at the end of its useful life or lease term. This value is crucial for calculating depreciation, determining the profitability of an asset over its lifespan, and for making informed decisions about asset replacement.

In accounting, jäännösarvo is subtracted from the asset's original cost to determine the depreciable amount. Depreciation is the systematic allocation of the cost of an asset over its useful life. For example, if a company purchases a machine for $10,000 and estimates its residual value at the end of its 5-year useful life to be $1,000, the depreciable amount is $9,000. This $9,000 would then be expensed over the 5 years through depreciation.

In the context of leasing, jäännösarvo is the predicted value of the leased asset when the lease agreement expires. This value significantly impacts the monthly lease payments. A higher estimated residual value generally leads to lower lease payments, as the lessor anticipates recovering a larger portion of the asset's cost at the end of the lease. Conversely, a lower residual value results in higher lease payments. The accuracy of the residual value estimation is important for both lessors and lessees to avoid unexpected costs or gains at the end of the lease term. Industries like automotive leasing heavily rely on accurate jäännösarvo predictions.