7.	INVENTORIES

Inventories valued at LIFO (last-in, first-out), consist of the following (in thousands):


	September 30, 2017			December 31, 2016
Finished goods	$	23,486		$	29,686
Raw materials		21,344			20,231

Total FIFO (first-in, first-out) inventories		44,830			49,917
Reserve to adjust inventories to LIFO value		(21,371	)		(21,371	)

Total LIFO inventories	$	23,459		$	28,546

The Company utilizes the LIFO method of accounting related to its wood-alternative decking and residential railing products, which generally provides for the matching of current costs with current revenues. However, under the LIFO method, reductions in annual inventory balances cause a portion of the Company’s cost of sales to be based on historical costs rather than current year costs (LIFO liquidation). Reductions in interim inventory balances expected to be replenished by year-end do not result in a LIFO liquidation. Accordingly, interim LIFO calculations are based, in part, on management’s estimates of expected year-end inventory levels and costs which may differ from actual results. Since inventory levels and costs are subject to factors beyond management’s control, interim results are subject to the final year-end LIFO inventory valuation. There were no LIFO inventory liquidations or related impact on cost of sales in the nine months ended September 30, 2017 or 2016.

Inventories valued at lower of cost (FIFO method) and net realizable value consist of the following (in thousands):


	September 30, 2017		December 31, 2016
Work-in-process	$	580	$	—
Raw materials		1,990		—

Total FIFO inventories	$	2,570	$	—

The Company utilizes the FIFO method of accounting related to its commercial railing and staging products. Work-in-process includes estimated production costs.