net realizable value

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Related to net realizable value: replacement cost, Fair value

Net Realizable Value

The net asset value of an asset or investment if it were sold, less the estimated cost of the sale and the amount the seller would have to spend to bring the asset or investment to a state where it can be sold. The NRV is used in GAAP accounting rules to ensure that the value of an asset or investment is not overstated.

net realizable value

the amount for which a FIXED ASSET or CURRENT ASSET can be sold, less any selling expenses involved. Net realizable value of an asset may be below its Net Book Value in which case the ACCOUNTING PRINCIPLE of prudence would suggest that the value of the asset in the company's LEDGER accounts should be adjusted downward to avoid overstating asset values in the BALANCE SHEET.

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References in periodicals archive ?

IFRS GlaxoSmithKline plc Footnote 2 Inventories are included in the financial statements at the lower of cost (including raw materials, direct labor, other direct costs, and related production overheads) and net realizable value.

Inventory valuation under IFRS and GAAP: this article is based on a study supported by the IMA[R] research foundation

The major difference was the strong opposition of Orchestra's management to using net realizable value to value the company's subsidiaries.

Mark to market: the U.K. experience

The amounts reported as assets should be amortized over the estimated benefit period based on the proportion of current-period revenue from the advertising to probable remaining future revenue, subject to a test of net realizable values.

Reporting on advertising costs

The SOP is fairly clear in its explanation; the appendix defines it as "the value attributed to the reconstituted entity, as well as the expected net realizable value of those assets that will be disposed of before reconstitution occurs.

Accounting for bankruptcies: implementing SOP 90-7

Audits off Banks, however, provided little guidance on determining net realizable value and did not require the use of discounting for purposes of determining net realizable value as the SOP and the other audit and accounting guides did.

Accounting for foreclosed assets

The standard will not require the disclosure of writedowns to net realizable value.