Net Realizable Value
/ˌnɛt ˌriːəˈlaɪzəbəl ˈvæljuː/
Definitions
- (n.) The estimated selling price of an asset in the ordinary course of business minus the estimated costs of completion, disposal, and transportation.
Inventory is recorded at net realizable value to reflect its true economic worth.
Forms
- net realizable value
Related terms
See also
Commentary
Net realizable value is a crucial valuation concept ensuring assets are not overstated on financial statements, reflecting realizable cash flows rather than historical cost.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.