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Cases when Raw Material valued at the Net Realisable Value or Current Replacement Cost?

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Question added by Jijumon James , SENIOR ACCOUNTANT , BADR AL SAMAA HOSPITAL
Date Posted: 2015/01/10
ايمن محمد عاطف محمد
by ايمن محمد عاطف محمد , Director of the control and regulation unit , ACOLID

Net realizable value (NRV) is a method of evaluating an asset's worth when held in inventory, in the field of accounting. NRV is part of the Generally Accepted Accounting Principles and International Financial Reporting Standards (IFRS) that apply to valuing inventory, so as to not overstate or understate the value of inventory goods. Net realizable value is generally equal to the selling price of the inventory goods less the selling costs (completion and disposal).It is expected sales price less selling costs (e.g. repair and disposal costs).In formula: