Net realizable value difinition including break down of areas in the definition. Analyzing the definition of key term often provides more insight about concepts. Net realizable value can be defined as: Expected selling price (value) of an item minus the cost of making the sale. Net realizable value is the sales price less minus the costs that would be needed to bring the inventory up to sale and the cost of sale. Net realizable value is often used when trying to assess the value of inventory under the lower of cost or market principle.
