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Net Realizable Value Calculator

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Asset Management Basics of Financial Accounting

✖Expected Sale Price is the expected amount that the inventory will be sold for in the ordinary course of business.ⓘ Expected Sale Price [ESP]			+10% -10%
✖Disposal Costs refer to the expenses incurred by a company when getting rid of or disposing of assets, inventory, or waste materials.ⓘ Disposal Costs [Disp.C]			+10% -10%

✖Lower of Cost or Net Realizable Value means that inventory should be reported on the balance sheet at either its original cost or its net realizable value, whichever is lower.ⓘ Net Realizable Value [LCRV]

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Net Realizable Value Solution

STEP 0: Pre-Calculation Summary

Formula Used

Lower of Cost or Net Realizable Value = Expected Sale Price-Disposal Costs
LCRV = ESP-Disp.C
This formula uses 3 Variables

Variables Used

Lower of Cost or Net Realizable Value - Lower of Cost or Net Realizable Value means that inventory should be reported on the balance sheet at either its original cost or its net realizable value, whichever is lower.
Expected Sale Price - Expected Sale Price is the expected amount that the inventory will be sold for in the ordinary course of business.
Disposal Costs - Disposal Costs refer to the expenses incurred by a company when getting rid of or disposing of assets, inventory, or waste materials.

STEP 1: Convert Input(s) to Base Unit

Expected Sale Price: 56000 --> No Conversion Required
Disposal Costs: 23000 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

LCRV = ESP-Disp.C --> 56000-23000

Evaluating ... ...

LCRV = 33000

STEP 3: Convert Result to Output's Unit

33000 --> No Conversion Required

FINAL ANSWER

33000 <-- Lower of Cost or Net Realizable Value

(Calculation completed in 00.004 seconds)

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Created by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

Vishnu K has created this Calculator and 200+ more calculators!

Verified by Keerthika Bathula

Indian Institute of Technology, Indian School of mines, Dhanbad (IIT ISM Dhanbad), Dhanbad

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< Asset Management Calculators

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Net Realizable Value Formula

LaTeX Go

Lower of Cost or Net Realizable Value = Expected Sale Price-Disposal Costs
LCRV = ESP-Disp.C

What is Net Realizable Value?

Net Realizable Value (NRV) is a key accounting term that represents the estimated selling price of goods or assets minus the estimated costs necessary to make the sale. It provides a conservative estimate of the amount that a company expects to realize from the sale of its inventory or assets, considering both the revenue from the sale and the costs associated with completing the sale.

In inventory accounting, NRV is particularly important when determining the value of inventory items that may be damaged, obsolete, or otherwise unsaleable at their original purchase price. By using NRV instead of the original cost to value these items, companies can ensure that their financial statements reflect a more accurate and realistic assessment of the inventory's value.

How to Calculate Net Realizable Value?

Net Realizable Value calculator uses Lower of Cost or Net Realizable Value = Expected Sale Price-Disposal Costs to calculate the Lower of Cost or Net Realizable Value, The Net Realizable Value is the profit realized from selling an asset, net of any estimated sale or disposal costs. Lower of Cost or Net Realizable Value is denoted by LCRV symbol.

How to calculate Net Realizable Value using this online calculator? To use this online calculator for Net Realizable Value, enter Expected Sale Price (ESP) & Disposal Costs (Disp.C) and hit the calculate button. Here is how the Net Realizable Value calculation can be explained with given input values -> 33000 = 56000-23000.

FAQ

What is Net Realizable Value?

The Net Realizable Value is the profit realized from selling an asset, net of any estimated sale or disposal costs and is represented as LCRV = ESP-Disp.C or Lower of Cost or Net Realizable Value = Expected Sale Price-Disposal Costs. Expected Sale Price is the expected amount that the inventory will be sold for in the ordinary course of business & Disposal Costs refer to the expenses incurred by a company when getting rid of or disposing of assets, inventory, or waste materials.

How to calculate Net Realizable Value?

The Net Realizable Value is the profit realized from selling an asset, net of any estimated sale or disposal costs is calculated using Lower of Cost or Net Realizable Value = Expected Sale Price-Disposal Costs. To calculate Net Realizable Value, you need Expected Sale Price (ESP) & Disposal Costs (Disp.C). With our tool, you need to enter the respective value for Expected Sale Price & Disposal Costs and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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