The amount that a company expects to realize in cash (naqd) or cash equivalent (ashbah al-naqd) as payment from customers in the ordinary course of business. For example, a company may need to calculate the net realizable value of its accounts receivable (receivables or zhimam madinah) taking into consideration multiple factors including collectibility, time to maturity, etc.
For inventory items, net realizable value refers to the estimated selling price less the estimated costs of completion and any other estimated costs without incurrence thereof the sale cannot be made. In this sense, it is a net amount expected to be realized from the sale of such items in the ordinary course of business.
This value is also known as cash realizable value (CRV) or simply as NRV.
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