Inventories

12 Months Ended

Dec. 31, 2023

4.4. Inventories

Accounting policies

Inventories are measured at the lower of cost and net

realizable value. Cost is determined using standard cost,

which approximates actual cost on a first-in first-out

(FIFO) basis. In addition to the cost of materials and

direct labor, an appropriate proportion of production

overheads is allocated to the cost of inventory. Net

realizable value is the estimated selling price in the

ordinary course of business less the estimated costs

necessary to make the sale.

Nokia classifies its inventories to raw materials and

semi-finished goods, finished goods, and contract work

in progress. Contract work in progress comprises costs

incurred to date for customer contracts where the

contractual performance obligations are not yet satisfied.

Contract work in progress will be recognized as cost of

sales when the corresponding revenue is recognized.


EURm	2023	2022
Raw materials and semi-finished goods	1 156	1 075
Finished goods	980	1 375
Contract work in progress	583	815
Total	2 719	3 265

The cost of inventories recognized as an expense during

the year and included in cost of sales is EUR 7 978 million

(EUR 8 623 million in 2022 and EUR 6 427 million in 2021).

The cost of inventories recognized as an expense includes

EUR 296 million (EUR 267 million in 2022 and EUR 203 million

in 2021) in respect of write-downs of inventory to net

realizable value.

The cost of inventories recognized as an expense has

been reduced by EUR 88 million (EUR 98 million in 2022

and EUR 112 million in 2021) in respect of the reversal of

write-downs of inventory to net realizable value. Previous

write-downs have been reversed primarily as a result of

changes in estimated customer demand.