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Accounting of scrapped items is generally at NRV(Net realisable value) i.e., Sales - selling expenses 

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scrap value is defined as the expected or estimated value of the asset at the end of its useful life. Scrap value is also referred to as an asset's salvage value or residual value.

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Scrap value is estimated value which can be realise after the useful life of assets.

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It is the estimated value of the asset at the end of its useful life

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Meaning Of Scrap

• Scrap is a left over or residue after a product has been manufactured.
• Low quality raw material or abnormal size of raw material gives scrap material.
• Faulty or wrong product designing, substandard or unsuitable raw material, abnormal machine operation etc are the main causes of scraps.

Accounting Treatment Of Scrap METHOD 1 Nominal sales price realized out of negligible scrap is treated as other income in cost account. METHOD 2 A scrap account is opened with the full amount of the scrap of the process or job if such a scrap value is significant. Process account or job account is given credit by the value of scrap. The scrap account is closed by the balance either of profit or loss to the profit or loss account. METHOD  3 Net sales value of scrap after deduction of selling and distribution costs is deducted either from the overhead amount or from the material cost. Deduction out of overheads is made to adjust the overhead ratio if scrap is not possible to identify in relation to a process or a job.  

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Scrap value is estimated value which can be realise after the useful life of assets.

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