Note 15- Inventory
NWG // FINANCIAL INFORMATION // THE GROUP
Note 15- Inventory
Accounting policies
Inventory is recognized at the lower of cost, as determined by applying the first-in / first-out principle( FIFO), and net realizable value. The net realizable value is calculated as the estimated selling price less estimated selling expenses. Rightof-return assets is included in the stock value for finished goods and are measured at the value of the costs of goods sold at the point of sale.
Key estimates and assumptions
The value of inventory is dependent on assessments in respect of the calculation of the net realizable value of the stock. These assessments may lead to impairment losses on the stock.
In the Corporate operating segment, the risk that the net realizable value will be lower than the cost is low, since as a large portion of the collection comprises timeless basic products for which there is a demand season after season.
In the Sports & Leisure operating segment about 31 % of sales are made through the promo sales channel, where the product range mainly comprises basic products with limited fashion risk and thus a lower risk for obsolescence. For sales made through the retail sales channel orders are sent to the factory upon receipt of a purchase order from the customer, which significantly limits the risk that the net realizable value will be lower than the cost.
In the Gifts & Home Furnishings operating segment most of the inventory volume consists of classic and best-selling products, many of which have a product cycle of more than 20 years. This limits the risk that the net realizable value will be lower than the cost.
SEK million |
2024 |
2023 |
Raw materials |
56.4 |
59.8 |
Work in progress |
0.7 |
0.7 |
Goods in transit |
367.1 |
365.9 |
Finished goods |
4 700.0 |
4 920.4 |
Total |
5,124.2 |
5,346.8 |
Inventory consists of clothes, gift items and accessories for resale as well as raw materials. As of 31 December 2024, the total obsolescence deductions, as an expression of the difference between acquisition value and fair value, amounted to SEK 180.1( 152.9) million and the provision in relation to finished goods amounted to 3.7 %( 3.0 %). The part of the stock which is recorded to net sales value amounts to SEK 440.7( 417.0) million.
For information regarding the value of inventory pledged as collateral against liabilities, see Note 21.
ANNUAL REPORT // 115