What is the difference between net realizable value and fair value?

Fair values are the appropriate measurement bases for broker-traders, because they have access to ready markets. Net realizable value is appropriate for producers, because they might not have such access. Where inventories are measured at fair value, that fair value must be measured in accordance with IFRS 13.

For example, an entity holds mineral inventories. The current market price is C10 per ton. The entity is in a forward contract to sell the stock at C12 per ton. In this situation, fair value is C10 per ton, but net realizable value is C12 per ton.