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Annual Report 2015 Report by the Board of Directors Notes Proposed distribution of earnings Auditor’s report Eleven-year review Quarterly information

Note 15 Inventories

All amounts in SEKm unless otherwise stated

December 31, 
Parent Company December 31, 
  2014 2015 2014 2015
Raw materials 3,543 3,438 16 20
Products in progress 333 303 1 1
Finished products 10,390 10,417 2,230 2,454
Advances to suppliers 58 21
Total 14,324 14,179 2,247 2,475

Inventories and work in progress are valued at the lower of cost, at normal capacity utilization, and net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale at market value. The cost of finished goods and work in progress comprises development costs, raw materials, direct labor, tooling costs, other direct costs and related production overheads. The cost of inventories is assigned by using the weighted average cost formula. Provisions for obsolescence are included in the value for inventory.

The cost of inventories recognized as expense and included in Cost of goods sold amounted to SEK 86,589m (78,687) for the Group.

Write-downs due to obsolescence amounted to SEK 331m and reversals of previous write-downs amounted to SEK 185m for the Group. The amounts have been included in the item Cost of goods sold in the income statement.