Net realizable value of asset,

Definition of Net realizable value of asset:

1. Future earnings an asset is expected to generate less the costs of owning, maintaining, operating, and (in case of land) developing the asset.

2. Selling price of an asset less the expenses incurred in the sales transaction, and in bringing the asset to the saleable state. This is the maximum amount in lower of cost or market value rule applied to inventory valuation.