Net Realizable Value Calculator

Calculate the net realizable value of inventory by subtracting expected costs from market value. This helps businesses determine the value of inventory that can be realized after selling it.

Input Parameters

Calculation Results

Calculation Formula

Net Realizable Value = Market Value - Selling Costs - Transportation Costs

Where:
Market Value: The expected selling price of the inventory
Selling Costs: Expenses associated with selling the inventory
Transportation Costs: Costs of transporting the inventory to customers

Result

Net Realizable Value:

Net Realizable Value Calculator Usage Guide

Learn how to use the Net Realizable Value Calculator and its working principles

What is Net Realizable Value?

Net Realizable Value (NRV) is the estimated selling price of an asset in the ordinary course of business, minus the costs of completion, disposal, and transportation. It represents the amount a company expects to receive from selling an asset after accounting for selling expenses.

How to Use This Calculator

  1. Enter the Market Value of your inventory (the expected selling price)
  2. Enter the Selling Costs (expenses to sell the inventory)
  3. Enter the Transportation Costs (costs to transport inventory to customers)
  4. Click the Calculate button to see the Net Realizable Value
  5. Use the Reset button to clear all inputs and start over

When to Use NRV

NRV is particularly important in accounting for inventory valuation. According to accounting principles, inventory should be valued at the lower of cost or NRV. This ensures that inventory is not overvalued on the balance sheet and reflects potential losses from unsold or slow-moving inventory.

Example

If you have inventory with a market value of $1,000, expected selling costs of $200, and transportation costs of $50, the NRV would be $750 ($1,000 - $200 - $50).