Net Realizable Value (NRV)

Net realizable value (NRV) is the value of an asset that can be realized upon the sale of the asset, less a reasonable estimate of the costs associated with the eventual sale or disposal of the asset. NRV is a common method used to evaluate an asset’s value for inventory accounting. NRV is a valuation method used in both Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS).