What is NRV ,and what is role..?

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Accepted Answer

NRV stands for Net Realizable Value. It is the estimated selling price of an asset minus the estimated cost of completion and disposal.

NRV is used in accounting to determine the value of inventory or assets that are expected to be sold.
It helps in determining the amount of loss that a company may incur if the inventory or asset is sold below its NRV.
NRV is calculated by subtracting the estimated cost of completion and disposal from the estimated selling price.
For example, if a company has inventory worth $10,000 but it will cost $1,000 to complete and dispose of it, and the estimated selling price is $8,000, then the NRV of the inventory is $7,000.
NRV is also used in the valuation of accounts receivable.
If the NRV of accounts receivable is less than their book value, then the company may need to make an adjustment to their financial statements.

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