What is the pure feasible value?

The net fee (NRV) is an accounting term used in two different ways. The first refers to the method of determining the value of the goods held in the inventory for the purpose of accounting statements. In stock valuation, businesses must be cautious to avoid underestimation or overvaluation of value, as this would cause distortion of financial accounts. Another meaning of this word is related to the calculation of the value of the receivables. These expenses may include marketing, stock storage and other costs. Another way to look at the value of the goods in the inventory is to evaluate them according to the costs for the company. When preparing a statement, the company must select a lower value to prevent the value of their inventory, which could mislead people examining these statements.

Pure realization can be higher than costs. If the stocks were awarded exclusively using this metric, it would create an artificially inflated rating of the inventory value. Calculations Clean RefugeFor example, Ota assumes the best possible costs at the time of sale and does not have to reflect exactly how good it will actually sell in the inventory. On the other hand, if the cost of the product is unusually high, inventory valuation may also create a beveled picture according to the company's costs.

In the case of receivables from understanding, a net fee value reflects the amount of outstanding accounts that are likely to be transferred to cash. This number is determined by a list of all receivables accounts and deduction of non -delective accounts. Removal of non -healing accounts is carried out to avoid an artificial high number and to provide a more realistic assessment of how much the company can expect to collect from the apartment in a given accounting period.

meaning intended when this term is used is usually clear from context. Financial statements that use a net realization value, display supplies and afterSearching in different areas, which will be clear. Companies can also show mathematics they have used to calculate the pure implemented values ​​if there are concerns that the value is not correctly listed or there are questions about how companies define NEB and the costs associated with the completion of the sale. Learning to read financial statements and understanding the conditions used is important for people like investors.