What is NRV in Accounting?

Net Realizable Value (NRV) in accounting refers to the estimated selling price of an asset in the ordinary course of business, minus any costs expected to incur for completion and sale. It provides a more accurate representation of an asset’s value on financial statements, ensuring that assets are not overstated. NRV is crucial for inventory valuation and impairment assessments, reflecting the potential revenue that can be realized from selling the asset.