Netrealiseerimisväärtus

Netrealiseerimisväärtus, often abbreviated as NRV, is an accounting term representing the estimated selling price of an asset in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. In essence, it is the net amount that an entity expects to realize from the sale of an inventory item. This value is used primarily for the valuation of inventory and is particularly relevant when the carrying amount of inventory exceeds its NRV.

The concept of NRV is a fundamental principle in inventory accounting and is often applied using the lower of cost or NRV rule. This rule dictates that inventory should be reported on the balance sheet at the lower of its historical cost or its net realizable value. If the NRV of an inventory item falls below its cost, a write-down is recognized to reduce the inventory's carrying value to its NRV. This write-down is typically recorded as an expense in the period it occurs.

Estimating NRV involves forward-looking considerations. The selling price is based on market prices, and the estimated costs include direct costs of production, selling expenses, and other costs directly attributable to bringing the inventory to its saleable condition. This valuation method ensures that inventory is not overstated on the financial statements, providing a more realistic picture of the company's assets and profitability. It also reflects the economic reality that an asset is only worth what it can be sold for, after accounting for the costs involved in that sale.