Definition of Abandonment Value
It is a value which reflects the valuation of the asset or the project at that point of time if sold off or disposed. It is the reflection of the value in terms of the cash receivable at that point of time. It happens sometimes the company would be interested to know the value of the asset or the project in order decide that whether to continue or get away with the same, in such scenario the valuation is carried out to understand the abandonment value of the asset.
It helps the person to decide whether the valuation of the asset or project is above the investment and can it be sold off at that point of time instead of incurring more costs. The issue arises where the company or the person does not have capital or decided not to invest more capital costs into the asset or the project. It can also be a decision where the value for that project for the whole life would be lesser than the abandonment at that point of time – Loan Places Near Me.