Net Realizable Value - NRV

Net realizable value lets you know how much you could get if you want to turn a specific asset into cash. It's usually used to value items companies have in inventory.

You've got an old lawnmower in your garage. You figure you could get $25 for it at a garage sale. Another way to say it: the NRV for that lawnmower is $25.

The only major twist to keep in mind with NRV is that you also have to take into account the cost of selling the product. So if someone agrees to buy your lawnmower for $25, but only if you deliver it to their house, you have to subtract the $0.50 worth of gas and the $10 in labor it costs you to drive it the 10 minutes over to the person buying it. It brings the NRV for the lawnmower to $14.50.