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This excerpt taken from the BKHM 10-K filed Aug 31, 2007. Inventory
Valuation
In general, our inventory is valued at the lower of cost to
acquire or manufacture our products or market value, less
write-offs of inventory we believe could prove to be unsaleable.
Manufacturing costs include the cost of the components purchased
to produce our products and related labor and overhead. We
review our inventory on a monthly basis to determine if it is
saleable. Products may be unsaleable because they are
technically obsolete due to substitute products, specification
changes or excess inventory relative to customer forecasts. We
currently reserve for inventory using methods that take those
factors into account. In addition, if we find that the cost of
inventory is greater than the current market price, we will
write the inventory down to the selling price, less the cost to
complete and sell the product.
This excerpt taken from the BKHM 10-K filed Sep 14, 2006. Inventory
Valuation
In general, our inventory is valued at the cost to acquire or
manufacture our products, less write-offs of inventory we
believe could prove to be unsaleable. Manufacturing costs
include the cost of the components purchased to produce our
products and related labor and overhead. We review our inventory
on a monthly basis to determine if it is saleable. Products may
be unsaleable because they are technically obsolete due to
substitute products, specification changes or excess inventory
relative to customer forecasts. We currently reserve for
inventory using methods that take those factors into account. In
addition, if we find that the cost of inventory is greater than
the current market price, we will write the inventory down to
the selling price, less the cost to complete and sell the
product.
During 2002, in connection with the acquisition of the optical
components business of Nortel Networks, we recorded the fair
value of the inventory that was acquired. In accordance with
SFAS No. 141, or SFAS 141 “Business
Combinations”, an adjustment was made in the 2003 accounts
for amendments to those provisional
Table of Contents
values. During 2003, a larger amount of acquired inventory was
sold than was expected at the time of the acquisition. As a
consequence, we increased the value of our inventory by
$20.2 million, increased current liabilities by
approximately $1.3 million, decreased intangible assets by
$9.1 million and increased property, plant and equipment by
$9.8 million.
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