Net salvage value refers to the market value of an asset less the costs associated with its disposal.
The process for arriving at a net salvage value for a line of railway traditionally includes the determination of the salvage value of track materials, the determination of the cost of environmental restoration, the determination of the value of the land, and the determination of the commercial impact leases or agreements may have on the overall net salvage value of the railway line.
The market value of each type of asset is established from various sources, such as federally-regulated railway companies, short line railway companies, rail and other track materials' manufacturers, and rail salvaging companies. The gross salvage value of the track and other track materials is then determined by calculating the product of the quantities and market values of the individual assets.
The net salvage value of the track and other track materials is then calculated by subtracting from the gross salvage value (the Market Value), the costs of removal and salvaging of the track and other materials. Salvaging and removal costs are estimated from the same market sources described above.
RWM utilizes NSV estimate procedures which give results that conform to those required by the Canada Transportation Act and the railway acts of the western provinces.
Last Updated on Monday, 15 November 2010 09:37