Applied Materials Inc. (AMAT)
Analysis of Inventory
High level of difficulty
Inventory Accounting Policy
Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (FIFO) basis. Applied adjusts inventory carrying value for estimated obsolescence equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions. Applied fully writes down inventories and noncancelable purchase orders for inventory deemed obsolete. Applied performs periodic reviews of inventory items to identify excess inventories on hand by comparing on-hand balances to anticipated usage using recent historical activity as well as anticipated or forecasted demand. If estimates of customer demand diminish further or market conditions become less favorable than those projected by Applied, additional inventory adjustments may be required.
Source: 10-K (filing date: 2018-12-13).
Applied Materials Inc., balance sheet: inventory
US$ in millions
|Oct 28, 2018||Oct 29, 2017||Oct 30, 2016||Oct 25, 2015||Oct 26, 2014||Oct 27, 2013|
|Customer service spares|
Based on: 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17), 10-K (filing date: 2013-12-04).
|Inventories||Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer.||Applied Materials Inc.’s inventories increased from 2016 to 2017 and from 2017 to 2018.|