Net Realizable Value of Accounts Receivable is an accounting term that refers to the estimated amount of money a company can reasonably expect to collect from outstanding customer invoices. It’s calculated by subtracting the estimated bad debt losses from the total accounts receivable balance. Essentially, it estimates how much money you can actually count on getting from customers who owe you money. Understanding net realizable value of accounts receivable gives businesses clarity on their expected cash flow and helps them make better financial decisions.