Nettorealisierbare

Nettorealisierbare is a term used in economics and accounting to describe the net realizable value of an asset or inventory. It represents the amount that an asset or inventory is expected to fetch in the market after deducting all costs associated with its sale. This concept is particularly important for inventory valuation, where it is used to determine the lower of cost or net realizable value.

The calculation of net realizable value involves estimating the selling price of the asset or inventory in the ordinary course of business and then subtracting any estimated costs of completion and the estimated costs necessary to make the sale. These costs can include direct materials, direct labor, manufacturing overhead, selling expenses, and transportation costs.

For inventory, applying the net realizable value principle ensures that assets are not overstated on the balance sheet. If the cost of an inventory item exceeds its net realizable value, the inventory must be written down to its net realizable value. This write-down is recognized as an expense in the period it occurs, impacting the company's profitability.

The concept is also relevant for other assets, such as accounts receivable, where the net realizable value would be the total amount owed minus any estimated uncollectible amounts. Similarly, for fixed assets, net realizable value might be considered when assessing impairment. The primary goal of using net realizable value is to present a more accurate and conservative picture of an entity's financial position.