The residual value method for imputed interest calculates the imputed interest of a company. The annual capital commitment is determined by the residual values of the assets and thus the imputed interest rate is calculated.
Table of Contents
Definition / explanation
Die Restwertmethode ermittelt die kalkulatorischen Zinsen auf das in einem Economic good gebundene Kapital zu einem bestimmten Zeitpunkt.
The average value of an object is calculated over a year and multiplied by a specified imputed interest rate.
The annual imputed interest obtained in this way is a measure of the costs that arise from the money that is not available but is invested in the object. These must be taken into account when calculating the price of those products that are manufactured using the item.
Calculation using the residual value method
The calculation for one year is based on the average value:
Start value + end value / 2 = average value
This average value is multiplied by the imputed interest rate:
Average value * calc. Interest rate = Imputed interest for one year
Overall, the following equation results:
(Value at the beginning of the year + value at the end of the year / 2) * imputed interest rate = imputed interest (for one year)
This calculation is carried out for each year of the useful life of the item, with the imputed interest decreasing each year.
Sample calculation
An example with a 2-year useful life:
Purchase price: 100,000 EUR
Annual depreciation: EUR 50,000
Imputed interest rate: 10 %
Year 1: (100,000 + 50,000 / 2) * 0.1 = 7,500 EUR
Year 2: (50,000 + 0/2) * 0.1 = EUR 2,500
Advantages and disadvantages of the residual value method
advantages - the exact illustration of the depreciation process
disadvantage - the more complex calculation and the uneven interest rates
Summary
- determines the average imputed interest per year on capital tied up in assets
- Calculation is compared to Average value method more complicated, but more precise due to the annual observation
English 
German 