Net Realizable Value Law and Legal Definition
Net realizable value is the measurement of an asset's value when the asset is prepared for sale. Net realizable value is the amount of cash, or its equivalent, expected to be derived from the sale of an asset minus the costs incurred as a result of the sale. These costs include the costs to complete the item and the costs of the sale.
Net realizable value is a commonly used in the field of inventory accounting. It is used in GAAP accounting rules to ensure that the value of an asset or investment is not overstated.