BKHM » Topics » Inventory Valuation

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


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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.
 

EXCERPTS ON THIS PAGE:

10-K
Aug 31, 2007
10-K
Sep 14, 2006

"Inventory Valuation" elsewhere:

Advanced Analogic Technologies (AATI)
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