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Accounts Receivable Net Realizable Value

oboloo Glossary

Accounts Receivable Net Realizable Value

Accounts Receivable Net Realizable Value (AR NRV) is a measurement of the liquidity of a business’s accounts receivable. It measures the ability of a business to turn its accounts receivable into cash in the short term. AR NRV is calculated by taking the total value of the business’s accounts receivable and subtracting out any accounts that might not be collectible due to bankruptcy, insolvency, or other losses. This figure provides an indication of how much liquid cash a business can expect from its customers within a certain period of time. By tracking AR NRV, businesses can keep closer tabs on their working capital and make decisions about issuing credit or collecting payments accordingly.

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