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Let's also explain/distinguish between the sales value at split-off method and the NRV method of allocating...

Let's also explain/distinguish between the sales value at split-off method and the NRV method of allocating costs for joint products!

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In sales value at split-off method , the basis for allocation of joint cost is Relative total sales value at the split off point. That is this method not only considers the quantity actally sold. All sales of the accounting period is considered and costs are splitted on the basis of such sales. it is used when selling price at split off stage is available.

In NRV method the basis of allocation is NRV final sales value minus cost beyond the split off to get them to a point of potential sale. it is used when selling price at split off stage is not available. It does not consider the sales value for the accounting year.

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