Inventories

3 Months Ended

Mar. 31, 2020

5.	INVENTORIES

Inventories valued at LIFO

(last-in,

first-out),

consist of the following (in thousands):


	March 31, 2020			December 31, 2019
Finished goods	$	43,458		$	42,281
Raw materials		33,050			31,686

Total FIFO (first-in, first-out) inventories		76,508			73,967
Reserve to adjust inventories to LIFO value		(19,062	)		(19,062	)

Total LIFO inventories	$	57,446		$	54,905

The Company utilizes the LIFO method of accounting related to its Trex Residential 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 March 31, 2020, there were no LIFO inventory liquidations or related impact on cost of sales in the three months ended March 31, 2020.

Inventories valued at lower of cost (FIFO method) and net realizable value were $1.3 million at March 31, 2020 and $1.2 million at December 31, 2019, consisting primarily of raw materials. The

Company

utilizes the FIFO method of accounting related to its Trex

Commercial

products.