A product will have a negative net realizable value if costs of further processing exceed sales value.

Question

Quizplus · Accepted Answer

Net realizable value is calculated as the estimated selling price in the ordinary course of business, minus any costs of completion, disposal, and transportation. If the costs of further processing exceed the sales value, it would result in a negative net realizable value, indicating that selling the product would lead to a loss.

A Product Will Have a Negative Net Realizable Value If