english - About Heraeus
english - About Heraeus
english - About Heraeus
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Inventories – excluding precious metals<br />
Raw materials and supplies, merchandise, as well as work-in-progress and finished goods<br />
are carried at the lower of cost and net realizable value. Advance payments on inventories<br />
are recognized at the prepayment amount. In addition to direct costs (production material<br />
and wages), costs of conversion also include the parts of the material and production<br />
overheads incurred in production in accordance with IAS 2. Costs of similar inventories<br />
are calculated using the weighted average method. Inventories are written down if the net<br />
realizable value is lower than the acquisition or manufacturing cost carried in the balance<br />
sheet. Appropriate additional allowances are formed for individual risks.<br />
Precious metals<br />
Depending on their use, precious metal inventories are broken down into three categories.<br />
The relevant classification is used to calculate the value of the precious metal inventories.<br />
The precious metal on stock consists of the precious metal inventories used in the production<br />
process as well as precious metal inventories held permanently in the company<br />
for strategic reasons. These precious metal inventories are carried at weighted average<br />
historical cost. On each closing date, a determination is made if the carrying amount<br />
is above the net realizable value so that an impairment loss would have to be recognized.<br />
If the reasons for an impairment no longer exist, the impairment loss is reversed and<br />
the inventory item written up to no higher than its original cost.<br />
The precious metal on demand includes any precious metal inventories that are held in<br />
the company only temporarily and are used to cover peak demands for precious metal<br />
in the production process exceeding the normal holdings. The precious metal for precious<br />
metal on demand is valued at the purchased price for which a contract has been entered<br />
into with the client, if available. The remaining precious metal is recognized at the lower<br />
of average cost and net realizable value (market price as of the closing date.)<br />
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