Realisable value — Accounting glossary

Distinguish the gross proceeds of disposal from a measure after specified costs. Inventory net realisable value under IAS 2 is estimated selling price less estimated costs of completion and sale. IAS 36 recoverable amount is the higher of fair value less costs of disposal and value in use. These are not interchangeable.

Worked example

Goods are expected to sell for $900, require $100 to finish and $50 to sell. Their inventory net realisable value is $750; compare it with cost under IAS 2.

Common mistake

Calling realisable value the IAS 36 recoverable amount without comparing value in use, or failing to deduct completion costs in inventory NRV.

Where it appears in your exams

Qualification	Exam	Relationship	Period
ACCA	FR	Supporting	September 2026–June 2027
ACCA	SBR	Supporting	September 2026–June 2027