Accounting Share · Inventory & purchasing
Inventory Lower-of-Cost-and-NRV Calculator
Compare inventory cost with an estimated net realisable value and calculate a potential item-level write-down.
The interactive calculator requires JavaScript. The formula and worked example below remain available.
01 / Enter your figures
Make the numbers yours.
Use one currency and consistent time periods. Amounts are shown in your input currency units; no currency conversion is performed.
02 / See the working
Your calculation
Enter your figures, then choose Calculate. Or load the worked example.
03 / Understand the method
Formula and method
NRV = Selling price − Completion and selling costs; Write-down = max(Cost − NRV, 0) × Units
Compare inventory cost with an estimated net realisable value and calculate a potential item-level write-down.
How to use this calculator
- Collect the figures for the same entity, currency and reporting period.
- Enter each input using its label and unit. For percentages, enter 15 to mean 15%.
- Choose Calculate, inspect the breakdown and compare the result with your assumptions.
- Change one input to explore a scenario. Recalculate after edits; display rounding does not round the underlying calculation.
Inputs at a glance
- Recorded cost per unit: A nonnegative numeric input in the units specified by the label.
- Expected selling price per unit: A nonnegative numeric input in the units specified by the label.
- Completion and selling costs per unit: A nonnegative numeric input in the units specified by the label.
- Units held: A nonnegative numeric input in the units specified by the label.
Worked example
Follow one calculation.
- Recorded cost per unit
- 30
- Expected selling price per unit
- 28
- Completion and selling costs per unit
- 3
- Units held
- 100
- Calculated result
- 500
Load this example in the interactive form to inspect the intermediate amounts.
Assumptions and interpretation
This simplified nonnegative inventory model is not the US GAAP lower-of-cost-or-market model for LIFO or retail inventories. Assess item grouping and any separate disposal obligations under applicable guidance.
The output is a model based on the figures entered. Check source records and use the accounting or contractual definitions relevant to your task before relying on a result.
Questions about this tool
What does the inventory lower-of-cost-and-nrv calculation measure?
Compare inventory cost with an estimated net realisable value and calculate a potential item-level write-down.
Which assumptions can change the result?
This simplified nonnegative inventory model is not the US GAAP lower-of-cost-or-market model for LIFO or retail inventories. Assess item grouping and any separate disposal obligations under applicable guidance.
Why can displayed totals differ slightly from my spreadsheet?
Calculations use the unrounded input values. Only the display is rounded. Use four or six decimal places to inspect small differences, and check the timing, sign conventions and rounding policy in your spreadsheet.
Reference and further learning
Inventory reporting reference: IAS 2. These original learning examples apply the displayed formula; the reference does not certify or endorse this calculator.
Look up an accounting term · Practise with accounting questions
Formula and worked example checked 4 November 2026. Calculations run in your browser without sending the entered figures to Accounting Share. Report a calculation issue with the tool name, example inputs and expected result; avoid sharing confidential records.
