Nettoarvo

Nettoarvo is a Finnish term meaning “net value.” It is used in accounting, finance, and economics to denote the value of an asset or item after certain deductions or adjustments have been made. The exact meaning depends on the context and is distinct from gross value (bruttoarvo).

In accounting, nettoarvo commonly refers to the net book value, which is the value of an asset on the balance sheet after subtracting accumulated depreciation and impairment from its original cost. It reflects the portion of the asset’s cost that has not yet been expensed and is used for reporting and analysis alongside other asset values.

Nettoarvo is also used for net realizable value (NRV) in inventory management: the estimated selling price minus costs of completion and selling expenses. NRV is used to value inventories and to determine write-downs when the recoverable amount falls below cost.

In price quotations and consumer contexts, nettoarvo may denote the net price before taxes, i.e., the amount charged before value-added tax or other taxes are added. In practice, the term’s exact interpretation can vary by sector and jurisdiction, so it is often clarified by context.

Examples:

- A fixed asset with a cost of 10,000 and accumulated depreciation of 3,000 has a nettoarvo (net book value) of 7,000.

- An inventory with an estimated selling price of 5,000 and costs to complete and sell of 500 has a NRV of 4,500.

- A list price of 1,200 including VAT can have a nettoarvo of 1,000 before tax if the VAT is 20%.

See also: gross value, net book value, net realizable value, net price.