Inventories are recognized at the lower of cost of purchase or production cost, or the net realizable value. The cost of purchase or production cost is calculated using the weighted average cost method. The net realizable value corresponds to the estimated sales proceeds less the estimated cost of completion.
Material costs incurred before the start of installation of an elevator or escalator are recognized as inventory for customer contracts at the lower of production cost or the net realizable value. With the start of revenue recognition, inventory for customer contracts is transferred to contract balances.
Inventory allowances are recognized for slow-moving stock. Technically obsolete items are written off.
|In CHF million
|Inventory for customer contracts
|Raw materials, semifinished and finished goods
|Advance payments to suppliers
Inventories include allowances and write-offs of CHF 108 million related to slow-moving and technically obsolete items (previous year: CHF 108 million).