Inventories

9 Months Ended

Jun. 30, 2019

Note 3 – Inventories

Inventories are valued at the lower of cost or market, with cost being determined principally by using the

last-in,

first-out

(“LIFO”) method and market defined as replacement cost for raw materials and net realizable value for work in process and finished goods. Appropriate consideration is given to obsolescence, excessive levels, deterioration, possible alternative uses and other factors in determining net realizable value. The cost of work in process and finished goods includes materials, direct labor, variable costs and overhead. The Company evaluates the need to record inventory allowances on all inventories, including raw material, work in process, finished goods, spare parts and used equipment. Used equipment acquired by the Company on

trade-in

from customers is carried at estimated net realizable value. Unless specific circumstances warrant different treatment regarding inventory obsolescence, the cost basis of inventories

three

four years

old is reduced by

while the cost basis of inventories

four

five years

old is reduced by

and the cost basis of inventories greater than five years old is reduced to zero. Inventory is typically reviewed for obsolescence on an annual basis computed as of September

, the Company’s fiscal year end. If significant known changes in trends, technology or other specific circumstances that warrant consideration occur during the year, then the impact on obsolescence is considered at that time.

No such provisions were made during the quarter and nine months ended June

2019

Net inventories at June 30, 2019 and September 30, 2018 consist of the following:


	June 30, 2019		September 30, 2018
Raw materials	$	12,352,000	$	11,254,000
Work in process		322,000		1,020,000
Finished goods		7,305,000		5,924,000
Used equipment		16,000		16,000

	$	19,995,000	$	18,214,000