Abstract The article discusses the additivity of net realizable values. Very little attention has been given to solving the problem of addition in current value accounting statements--adjusted historical cost, current replacement cost or net realizable value. With few exceptions, the implicit assumption has been made that as long as the items in the statement are measured in or adjusted to current terms, the addition will be valid. This assumption may be wrong at least part of the time particularly when applied to net realizable value. The realizable value of a group of assets will be computed as the maximum sum of the net realizable value of the various assets, the maximum level of aggregation before valuation being determined by the fact that a nonzero net realizable value must be derived from a verifiable market price. The objection might be raised that this computation for assets involves measurement of prices for assets or groups of assets followed by comparisons of these prices. The question of asset grouping must be answered satisfactorily before a net realizable value model can be completely developed and applied in general. The answer to this question will be provided through an examination of some general cases of asset interaction.
James C. McKeown (Sat,) studied this question.