ANNUAL REPORT 2017
EXPLORE OUR PERSPECTIVES

NOTE 8. INVENTORIES

Inventories consist of the following:

 December 31,
 20162017
Components and raw materials84,634104,333
Work in progress30,61437,047
Finished goods12,61814,218
Total inventories, gross127,866155,598
Allowance for obsolescence(15,527)(12,749)
Total inventories, net112,339142,849

The changes in the allowance for obsolescence are as follows:

December 31,
20162017
Balance at beginning of year(19,350)(15,527)
Charged to cost of sales(6,120)(6,312)
Reversals5,0124,973
Utilization of the provision5,1783,085
Foreign currency translation effect(247)1,032
Balance at end of year(15,527)(12,749)

On December 31, 2017, our allowance for inventory obsolescence amounted to €12,749, which is 8.2% of total inventory. The major part of the allowance is related to components and raw materials. The addition for the years 2016 and 2017 mainly relate to inventory items which ceased to be used due to technological developments and design changes which resulted in obsolescence of certain parts.

The cost of inventories recognized as costs and included in cost of sales amounted to €336.4 million (2016: €243.4 million).