Lower of Cost and Net Realizable Value (LCNRV) is a business accounting term that helps organizations make wise inventory decisions. It’s an important concept for those in charge of keeping track of inventory, as it allows them to accurately determine the value of their goods and determine when it’s time to sell off unneeded merchandise. Put simply, LCNRV is the lower of either the cost of goods or the net realizable value—the amount you can expect to receive from selling the items. Understanding this concept can help businesses maximize profits, minimize losses, and make more informed decisions about when to stock up and when to let go.