Which term describes the current estimated value of an asset after accounting for depreciation?

The term that describes the current estimated value of an asset after accounting for depreciation is known as residual value. Residual value represents the worth of an asset at the end of its useful life, calculated after considering the total depreciation that has occurred over time. This measure is crucial for accounting and financial planning, as it helps organizations assess the potential return on investment from their assets.

In the context of asset management, understanding residual value allows companies to make informed decisions about asset disposal, valuation for financial reporting, or determining trade-in values for equipment or machinery. It serves as a critical figure in the calculation of total cost of ownership and planning for future asset acquisitions or replacements.

Other terms might have related meanings but do not specifically refer to the estimated value after depreciation: net asset value generally refers to the total value of assets minus liabilities; market value represents the price an asset would fetch in the marketplace; and fair value pertains to an asset's estimated price in an arm's length transaction between knowledgeable parties. These distinctions clarify why residual value is the term that aligns perfectly with the concept of accounting for depreciation in asset valuation.