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Under AS 2, net realisable value (NRV) is best described as which of the following?
AEstimated selling price without any deduction for costs
BEstimated selling price less estimated costs of completion and sale
CCurrent purchase or replacement price of the inventory
DOriginal cost less accumulated depreciation to date
Answer & Solution
Correct answer: B. Estimated selling price less estimated costs of completion and sale
1. NRV reflects what the entity expects to actually realise from selling the inventory.
2. It is the estimated selling price in the ordinary course of business.
3. From this, the estimated costs of completion and costs necessary to make the sale are deducted.
_Source: ICAI BoS CA Intermediate Paper 1 (Advanced Accounting), Sept 2025 — Q.1(b), AS 2 Valuation of Inventories._
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