1. Definition
Scrap value is the amount realized from the sale of dismantled materials of a structure after it is demolished.
👉 In simple terms:
It is the value of materials like steel, bricks, timber, etc., obtained after demolition of a building.
2. Key Concept
- Applicable mainly to buildings, machinery, and structures
- Represents material recovery value only
- Does not include land value
- Always realized after dismantling or demolition
3. Formula
Scrap Value=Value of Recovered Materials−Demolition Cost
4. Example Calculation
Given:
- Value of recovered materials = ₹1,20,000
- Demolition cost = ₹20,000
Scrap Value:
Scrap Value=1,20,000−20,000=₹1,00,000
5. Factors Affecting Scrap Value
5.1 Type of Materials
- Steel and metal → high scrap value
- RCC → low scrap value
5.2 Condition of Materials
- Reusable materials increase value
- Damaged materials reduce value
5.3 Market Demand
- Higher demand for scrap → higher value
5.4 Demolition Cost
- Higher demolition cost reduces net scrap value
5.5 Accessibility
- Easy access reduces demolition cost
6. Importance of Scrap Value
6.1 In Valuation
- Helps determine residual value of building
6.2 In Demolition Decisions
- Assists in deciding whether demolition is economical
6.3 In Cost Analysis
- Used in lifecycle costing
6.4 In Recycling and Sustainability
- Promotes reuse of materials
6.5 In Urban Redevelopment
- Important for old building replacement
7. Scrap Value vs Salvage Value
| Aspect | Scrap Value | Salvage Value |
|---|---|---|
| Meaning | Value of dismantled materials | Residual value of asset |
| Scope | Only materials | Broader concept |
| Deduction | Includes demolition cost | Based on depreciation |
| Use | Demolition stage | End of useful life |
8. Typical Range
- Usually 2–10% of original cost
- Depends on material composition
9. Practical Example
- Old building demolished
- Steel, doors, and fixtures sold
👉 Money obtained = Scrap value
10. Role in Urban Planning
- Supports redevelopment projects
- Helps in cost-benefit analysis
- Encourages circular economy practices
- Important in smart city and TOD redevelopment
11. Conclusion
Scrap value represents the recoverable value of materials after demolition of a structure. It is an important factor in valuation, demolition planning, and sustainable construction practices. Proper estimation of scrap value helps optimize costs and supports efficient resource utilization.
Track2Training 