Inventories

6 Months Ended

Jun. 30, 2019

5.	INVENTORIES

Inventories valued at LIFO

(last-in,

first-out),

consist of the following (in thousands):


	June 30, 2019			December 31, 2018
Finished goods	$	25,518		$	46,638
Raw materials		33,924			27,321

Total FIFO (first-in, first-out) inventories		59,442			73,959
Reserve to adjust inventories to LIFO value		(18,442	)		(18,442	)

Total LIFO inventories	$	41,000		$	55,517

The Company utilizes the LIFO method of accounting related to its Trex Residential 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. As of June 30, 2019, management estimates that interim inventory balances will be replenished by

year-end

and there were

LIFO inventory liquidations or related impact on cost of sales in the six months ended June 30, 2019.

Inventories valued at lower of cost (FIFO method) and net realizable value were $1.9 million at June 30, 2019 and $2.3 million at December 31, 2018, consisting primarily of raw materials. The Company utilizes the FIFO method of accounting related to its

Trex Commercial

architectural railing and staging systems for the commercial and multi-family market.