Inventories are carried at the lower of cost or net realizable value. When determining cost, the “first-in, first-out” (FIFO) and weighted average cost formulas are used. In addition to directly attributable unit costs, manufacturing costs also include overheads attributable to the production process, which are determined on the basis of normal capacity utilization of the production facilities.
Inventories are written down if the net realizable value is lower than the acquisition or manufacturing cost carried in the balance sheet.
Since the products are not manufactured within the scope of long-term production processes, the manufacturing cost does not include any borrowing cost.
Inventory prepayments are recorded under other current assets.
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