BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Fair value less cost to sell
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Estimated selling price less normal margin and cost to sell
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Estimated selling price less cost to complete and cost to sell
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Fair vale less normal margin and cost to complete.
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Detailed explanation-1: -Net realizable value (NRV) is the value for which an asset can be sold, minus the estimated costs of selling or discarding the asset. The NRV is commonly used in the estimation of the value of ending inventory or accounts receivable.
Detailed explanation-2: -Net realizable value (NRV) is is a common method used to evaluate an asset’s value for inventory accounting. It is found by determining the expected selling price of an asset and all the costs associated with the eventual sale of the asset, and then calculating the difference between these two.
Detailed explanation-3: -Net realizable value is generally equal to the selling price of the inventory goods less the selling costs (completion and disposal). Therefore, it is expected sales price less selling costs (e.g. repair and disposal costs). NRV prevents overstating or understating of an assets value.