Residual value is relevant when calculating double-declining-balance depreciation.

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Residual value is the estimated value of an asset at the end of its useful life. It is deducted from the original cost of an asset in determining the depreciable amount, which is the total amount that can be depreciated over the asset's useful life. In double-declining-balance depreciation, the depreciation expense is doubled and applied to the book value of the asset (original cost minus accumulated depreciation) each year. The residual value is used to determine when to stop depreciating the asset.

Residual Value Is Relevant When Calculating Double-Declining-Balance Depreciation