IAS #02 (Inventories) - Definition of NRV

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Dear Frnds!

I have a question regarding IAS-02, PLS any one define NRV??

how NRV calculate??


Regards


Muhammad Umar

[A.A]

Net realizable value The estimated selling price in the normal course of business less
estimated cost to complete and estimated cost to make a sale.

8. NET REALIZABLE VALUE
8.1 Inventories are written down to net realizable value (NRV) on the basis that assets should not
be carried in excess of amounts likely to be realized from their sale or use. Write-down of inventories
becomes necessary for several reasons; for example, inventories may be damaged or become
obsolete or their selling prices may have declined after year-end (or period-end).
8.2 Inventories are usually written down to their NRV on an item-by-item basis, but in certain
conditions, also by a group of similar or related items. It is, however, not appropriate to mark down
inventories by classification of inventories, such as finished goods, or all inventories in a geographical
segment or industry.
8.3 NRV estimates are based on most reliable evidence of the inventories’ realizable amounts.
They take into account price fluctuations or costs directly related to events after the period-end,
confirming conditions that exist at the period-end. Estimates of NRV also take into account the
reason or purpose for which inventories are held. For instance, NRV of a quantity of inventory being
held to satisfy firm sales contracts or service contracts are based on contract prices.
8.4 Inventories of raw materials and other supplies held for use in production of inventories are
not written down below cost if the finished goods in which they will be used are expected to be
sold at or above cost. However, when decrease in the price of raw material indicates that the cost of
the finished goods exceeds net realizable value, the materials are written down to NRV. In such
cases, the replacement cost of the raw materials may be the best available measure of their NRV.
8.5 NRV is assessed in each successive period. If changes in economic circumstances warrant,
earlier write-downs are reversed to make the new carrying amount equal to the lower of cost and
the revised NRV.

SourceWiley IFRS Practical Implementation Guide and Workbook.

[VITAL]

WHAT IS YOUR PROBLEM, INNOCENT MAKER?

YOU BECOME SEMI-SENIOR IN THREE DAYS TIME BY WRITING SAME THING AGAIN AND AGAIN.

ARE YOU ON SOMETHING????

[kamranACA]

Vital

It is some spam. Admin needs to control it and delete all its posts.

Regards,