What is net realizable value, Accounting Basics

Assignment Help:

Q. What is Net realizable value?

Companies must not carry goods in inventory at more than their net realizable value. Net realizable value is the approximate selling price of an item less the estimated costs that the company incurs in preparing the item for sale and selling it. Obsolete, Damaged or shopworn goods often have a net realizable value lower than their historical cost and must be written down to their net realizable value. But goods don't have to be obsolete, damaged or shopworn for this situation to occur.

Technological changes as well as increased competition have caused significant reductions in selling prices for such products as DVD players, computers, TVs and digital cameras.


Related Discussions:- What is net realizable value

The immediate and long-term effects of the two event, Your client, Hope, of...

Your client, Hope, of Hope's Country Corner, is curious about two events will influence both taxable and financial income. The first event involves the purchase of pottery-making e

Donna, Jan. 1 Purchased a small company and recorded goodwill of $150,000. ...

Jan. 1 Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite. May 1 Purchased for $90,000 a patent with an estimated useful life of 5 years an

Define gains and losses, Q. Define Gains and Losses? Gains are raise in...

Q. Define Gains and Losses? Gains are raise in equity net assets from peripheral or incidental transactions of an entity as well as from all other transactions and other events

Pro forma financial statements, Pro forma Financial Statements In ...

Pro forma Financial Statements In accounting, a financial statement in which the amounts begin are fully or partially estimates; from the Latin for "as a matter of form."

Calculate the wacc, The capital structure of Wild West Inc. is as follows: ...

The capital structure of Wild West Inc. is as follows: -            Debts: $5,000,000 (face value) bonds with coupon rate at 8.00% and current price at par -

Adjustments for accrued items, A few account balances remain the same becau...

A few account balances remain the same because no adjustments have affected them. For illustration the balance in Accounts Payable doesn't change and is simply extended to the Adju

Reasonable accuracy, Some the other concepts, as for example: the Matching ...

Some the other concepts, as for example: the Matching concept, the Dual Aspect concept and the Realization concept are discussed in further sections, and as they have not been take

Meaning of social accounting, Question Social accounting is a way of ca...

Question Social accounting is a way of calculating and reporting on an organisation's ethical and social performance. It is principally concerned with offering a complementary

Determine the proposal''s appropriateness and economic, Determine the propo...

Determine the proposal's appropriateness and economic viability. For all scenarios, assume spending occurs on the first day of each year and benefits or savings occurs on the las

Explain sales return, Q. Explain sales return? A sales return is mercha...

Q. Explain sales return? A sales return is merchandise return by a buyer. Buyers and Sellers regard a sales return as a cancellation of a sale. Otherwise some customers keep un

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd