Residual Value
The residual value of a procurement is the difference between the current market value of the assets procured and the outstanding balance owed on the financing used to procure those assets. The objective of a procurement is to ensure that, at the end of the term of the financing, the residual value is as close to zero as possible.
Achieving a zero-residual value means that you have purchased an asset for its full market value and will not owe any money on it when the financing expires. If you owe more than the market value of the asset, then you have what is called negative equity. This can happen if you purchase an asset with a long-term loan and then sell it or refinance it before the loan is paid off.