It stands for net realizable value; the amount of cash that is expected to be received from the sale of an asset such as an inventory item or net accounts receivable. For an inventory item, it the estimated selling price in the ordinary course of business minus any cost incurred in selling the item. With respect to accounts receivable, it is the net cash receipt attained from selling receivables to a third party. Net realizable value (NRV) could sometimes relate to the balance in the general ledger account “accounts receivable” minus the balance in the account “allowance for doubtful accounts.
Net realizable value is a firm-specific measure of value.
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