Accounting Glossary
Net Realisable Value Explained: Why Your £80,000 of Stock Might Need to Be Written Down to £62,000
That £80,000 stock figure on your balance sheet might be fiction. Accounting rules require inventory to be valued at the lower of cost and net realisable value, meaning obsolete, recalled, or slow-moving stock may need writing down — turning a healthy-looking warehouse into a £62,000 reality check before your accounts are finalised.