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In the field of business, proper valuation of any asset is a necessary factor. For doing a proper valuation, there are two methods which are very effective and popular. They are:

  1. Generally Accepted Accounting Principles (GAAP)
  2. International Financial Reporting Standards (IFRS)

Net realizable value Method is an integral part of Generally Accepted Accounting Principles, to evaluate inventory assets.  To cope-up with this method, for doing homework most of the students required an expert assistance. Don’t west your time for finding an accurate assistance here and there, just log on myhomeworkhelp.com for receiving an easy but effective net realizable value method homework help.

More bits about the subject topic

The main focus of this method is to avoid over estimation and under estimation for doing the proper valuation of your assets. The steps those are followed to determine net realizable value are:

  • Determination of existing market value of proposed inventory
  • Addition of all costs which are associate only with finishing and selling of that inventory
  • Deduction of selling  cost from market value

All costs that need to subtract from the market value to determine actual net realizable value are:

  • Completion cost of inventory
  • Transportation cost of inventory
  • Disposition cost of the same

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How it works

NRV evaluates only the genuine value of a product that a seller receives from a customer after selling the product. Genuine value means, the value without selling expenses.  This process of estimation for assets and inventory termed as a conservative process.For example, suppose A person buys a washing machine from manufacturer.  Suppose-

  • All kind of manufacturing cost of that washing machine is $ 500
  • Selling expenses such as packaging and transporting cost is$ 100

So manufacturer will add $ 100 with $ 500 as a selling price. Hence customer has to pay $ 600 to buy that product so,

  • Selling price of that washing machine is $ 600
  • And NRV is $ 600 – $ 100 = $ 500

Many other calculations are involved in this process depending upon the types of products and how they are manufactured. To learn, all these mathematical tricks and for doing homework and assignment, students always need an effective net realizable value method homework help.

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