Note 6. Inventories
Inventories consist of the following:
|Components and raw materials||78,579||69,709|
|Work in process||31,442||30,040|
|Total inventories, gross||130,094||144,813|
|Allowance for obsolescence||(23,696)||(18,883)|
|Total inventories, net||106,398||125,930|
The changes in the allowance for obsolescence are as follows:
|Balance at beginning of year||(63,181)||(23,696)|
|Charged to cost of sales||(8,648)||(2,282)|
|Utilization of the provision||6,464||8,514|
|Foreign currency translation effect||2,531||(1,698)|
|Balance at end of year||(23,696)||(18,883)|
The addition for the years 2013 and 2014 mainly relate to inventory items which were ceased to be used due to technological developments and design changes which resulted in in obsolescence of certain parts.
On December 31, 2014, an increase of our overall estimate for obsolescence and lower market value by 10% of our total inventory balance would result in an additional charge to cost of sales of €15 million.
The cost of inventories recognized as costs and included in cost of sales amounted to €246.0 million (2013: €207.9 million).