What is NRV (Net Realizable Value) ?

Accordance with PSAK no. 14 (Revised 2008), do not know if there is a newer revision again,, hehehe

What is NRV?? NRV if seen from the definition under PSAK are as follows:

"Net Realized value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale"

In Simply way, NRV Definition based on PSAK is NRV = selling price - costs to make the sale.

The value of NRV should be greater than the value recorded in the inventory, if the value of NRV is smaller, then the company needs to make allowance for declining in value of inventories. This maybe started from basic accounting principles "conservatism" and another accounting principles that "the carrying value of assets may not be greater than the value recoverablenya"

But do not worry for the company which is at this year has been reserved for declining value of inventories due to NRV calculation is smaller than the value of inventory, because if the next year when the company do NRV calculation again, and there was no indication of impairment (as a result of NRV more greater than the carrying value of inventory), the provision for declining value of inventories is allowed to be recovered (Reversal)

Sentences in PSAK like below :
"When the conditions that originally resulted in the declining value of inventories below cost did not exist anymore or when there is clear evidence for an increase in net realizable value because of changes in economic circumstances, the amount of impairment should be reversed (in this case the recovery is limited to the amount of initial impairment ) "

Then how to make NRV calculation :
Because PSAK mentioned regular selling price less the cost to sell, then the calculation is only done NRV of finished goods inventory.

well if we want to calculate, so we must calculate per product, for example, the company has finished goods inventory products A, B, C, then we have to calculate NRV for each product.

NRV calculation has been done by looking at the sales after the reporting date until the inventory quantity recorded in the statement of financial position run out or close to zero, and then reduced by selling costs are going to sell it for example the cost of shipping, etc.

Ilustration :

If the company has a finished goods inventory, December 31, 201x Rp 1,000,000,000 to the quantity of 2000 MT, the NRV calculation has been done by looking at the sales after December 31 201x until total sales close to 2000 MT or 2000 MT exactly.