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Last Update: 03/12/2009
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Part of the audited Consolidated Financial Statements and Management´s Analysis

14 -- Inventories

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Million €

2008

2007

Raw materials and factory supplies

1,769

1,800

Work-in-process, finished goods and merchandise

4,924

4,708

Advance payments and services-in-process

70

70

 

6,763

6,578

Work-in-process, finished goods and merchandise are combined into one item due to the production conditions in the chemical industry. Services-in-process relate primarily to inventory not invoiced at the balance sheet date.

Price declines in the second half of 2008 led to an increase in the allowances for raw materials, intermediates and end products. Overall, impairment losses on inventory amounted to €159 million in 2008 and €16 million in 2007. Of the total inventory, €1,343 million in 2008 and €1,444 million in 2007 was valued at net realizable value.

Reversals of impairment losses are made if the reasons for the impairment no longer apply. Reversals amounted to €5 million in 2008 and €4 million in 2007.

Inventories were valued using the weighted-average cost method.

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