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|Note 16 Inventories|
Inventories are reported at the lower of cost and net realisable value with cost being determined by the first-in first-out (FIFO) method or, alternatively, weighted average cost where it approximates FIFO. The cost of finished goods and work in progress comprises raw material, direct labour, depreciation, other direct costs and related production overhead but excludes interest expenses. Net realisable value is the estimated selling price in the ordinary course of business, less costs of completion and sale.
Where market conditions result in the manufacturing costs of a product exceeding its net realisable value, a valuation allowance is made. Valuation allowances are also made for old, slow moving and obsolete finished goods and spare parts. Such valuation allowances are deducted from the carrying value of the inventories in the Consolidated statement of financial position.
|As at 31 December|
|Materials and supplies||332||343|
|Work in progress||77||81|
|Spare parts and consumables||282||283|
|Advance payments and cutting rights||102||108|
|Obsolescence allowance - spare parts and consumables||-98||-106|
|Obsolescence allowance - finished goods||-9||-9|
|Net realisable value allowance||-6||-4|
|Total||1 346||1 373|
|EUR 14 (EUR 10) million of inventory write-downs have been recognised as an expense. EUR 7 (EUR 6) million have been recognised as a reversal of previous write-downs.|