Reworkable service parts and current inventories are valued at purchase or production cost, or at lower net realizable value.
The purchase cost of reworkable service parts, raw materials, supplies and merchandise is calculated using the average valuation method.
In accordance with IAS 2 “Inventories,” pro-rata material costs and production overheads (assuming normal utilization), including depreciation (Glossary) on production equipment and production-related social security costs, are included along with production material and production wages in the production cost of reworkable service parts and finished and unfinished products. Interest on loan capital is not capitalized.
Write-downs for inventory risks are undertaken to an appropriate and adequate extent. Lower net realizable values are used where required. If the reasons for a lower valuation no longer apply to inventories that have formerly been written down and the net selling price has therefore risen, the reversal of the write-down is recognized in the Group income statement as a reduction of cost of sales.
As of the balance sheet date, there were no substantial orders that would require capitalization in accordance with IAS 11 “Construction Contracts.”
