Net Realizable Value - NRV

The value of an asset that can be realized by a company or entity upon the sale of the asset, less a reasonable prediction of the costs associated with either the eventual sale or the disposal of the asset in question.

Investopedia Says:
Net realizable value is a commonly used method of evaluating an asset's worth in the field of inventory accounting. NRV is part of GAAP rules that apply to valuing inventory, so as to not overstate or understate the value of inventory goods.

Related Links:
We go over these methods of calculating this component of the balance sheet, and how the choice affects the bottom line. Inventory Valuation For Investors: FIFO And LIFO

The amount a property is expected to bring after deductions for time on the market, selling expenses, and holding costs. Often applied to Distressed Properties properties in depressed markets, or foreclosed properties owned by lending institutions.
Example: A property was thought to have a market value of $1 million. It had been foreclosed and was held by a bank that expected it to take two years to sell, during which time operating expenses would exceed rental income. The bank examiner made a write-down to net realizable value, or today's present value of a future sale.

1. Expected selling price of an inventory item less expected costs to complete and dispose. This is the ceiling amount in applying the Lower of Cost or Market rule to inventory valuation.

2. Gross accounts receivable less allowance for doubtful accounts, representing the expected collectibility of those receivables.