This excerpt taken from the SNWL 10-K filed Mar 14, 2007.
Inventories are stated at the lower of standard cost (which approximates cost determined on a first-in, first-out basis) or market. The Company writes-down the value of inventories for estimated excess and obsolete inventories based upon assumptions about future demand and market conditions. Inventories consist primarily of finished goods. Inventory reserves, once established, are only reversed upon sale or disposition of related inventory.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)