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Inventories

12 Months Ended

Aug. 31, 2013

Note 3 — Inventories

Components of inventory are as follows:


	August 31,
	2013		2012
	(Dollars in thousands)
Raw materials	$	10,381	$	19,773
Work in progress		1,913		1,542
Finished goods		21,698		22,357

Total inventories	$	33,992	$	43,672

To reduce the price volatility of corn used in fulfilling some of its starch sales contracts, Penford, from time to time, uses readily marketable exchange-traded futures as well as forward cash corn purchases. The exchange-traded futures are not purchased or sold for trading or speculative purposes and are designated as hedges. See Note 14. General and administrative expenses are not capitalized as a component of inventory.

- Definition

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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