Nettoveräußerungswert

NettoVeräußerungswert, often abbreviated as NVW, is a German term that translates to Net Realizable Value (NRV). It represents 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. This valuation method is primarily used in accounting for inventory and other assets.

The calculation of NettoVeräußerungswert involves two main components. Firstly, the expected selling price of the asset is determined. This should be based on market prices and current sales trends. Secondly, all direct costs associated with bringing the asset to a saleable condition and completing the sale are deducted from this estimated selling price. These costs can include manufacturing costs, marketing expenses, distribution costs, and any other directly attributable expenses.

The principle of NettoVeräußerungswert is to ensure that assets are not overstated on a company's balance sheet. If the NettoVeräußerungswert of an asset falls below its original cost or carrying amount, an impairment loss must be recognized, and the asset's value must be written down to its NettoVeräußerungswert. This accounting treatment reflects a prudent approach to financial reporting, aligning asset values with their potential economic benefit. It is a key concept in determining the lower of cost or net realizable value for inventory valuation under international accounting standards.