Inventories are stated at the lower of cost and net realizable value. Cost is determined by the weighted average cost method. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. A new assessment of the net realizable value is made in each subsequent period. When the circumstances that previously caused inventories to be written down below cost are no longer existing or when there is clear evidence of an increase in the net realizable value because of changed economic circumstances, the amount of the write-down is reversed. Costs of inventories include gains/losses on qualifying cash flow hedges transferred from equity at the moment of initial recognition of inventories.
The composition of the inventories is as follows:
in thousands of EUR
31 December 2020
31 December 2019
Provision for obsolete inventory
An amount of €15,329 (2019: €15,881) has been recognized in the consolidated Income Statement relating to obsolete inventories in ’Cost of sales and directly related costs’.