| Abstract: | Many businesses are overlooking a current cost of operation which should be matched against current revenues. This cost, really a bundle of related cost items, is incurred at the end of an asset's useful life. In the public utility sector the general term ascribed to this cost element is “negative salvage”. In this note some current examples of negative salvage are identified and some of the causes of negative salvage are discussed. The introduction of negative salvage into the classroom discussion of depreciation provides an interesting new example of the matching/allocation problem. |
