Cash realizable value is the term used for net realizable value (NRV) when it is applied to receivables: the amount of cash a business expects to collect from customers who owe it money. It equals gross accounts receivable minus the allowance for doubtful accounts. The main entry explains NRV in its other uses as well, including inventory valuation and joint costs.
How the figure is used
Many US textbooks use "cash realizable value" in the chapter on receivables, because the word cash makes clear that the figure is a collection estimate rather than a selling price. On the balance sheet it is shown as accounts receivable, net. If a company has $250,000 of receivables and an allowance of $10,000, the cash realizable value is $240,000.
Writing off a specific bad account does not change cash realizable value, because the write-off reduces both gross receivables and the allowance by the same amount. The figure changes only when the allowance itself is adjusted through bad debts expense, or when receivables are collected or new credit sales are made.
The allowance account is also called the allowance for uncollectible accounts. For inventory, the related rule is the lower of cost or net realizable value, under which stock is written down when the amount it can be sold for, less costs to complete and sell, falls below its cost.