Inventories

12 Months Ended

Dec. 31, 2020

Inventories

Inventories are stated at the lower of cost or market for last-in, first-out (“LIFO”) inventory or lower of cost or net realizable value for first-in, first-out (“FIFO”) inventory. At December 31, 2020 and 2019, 42% and 53%, respectively, of total inventories were determined using the LIFO method, which consists primarily of manufactured inventories, including service parts for the lift truck business in the United States. The FIFO method is used with respect to all other inventories.

The cost components of inventory include raw materials, purchased components, direct and indirect labor, utilities, depreciation, inbound freight charges, purchasing and receiving costs, inspection costs and warehousing costs. Reserves are maintained for estimated obsolescence or excess inventory equal to the difference between the cost of inventory and the net realizable value based upon assumptions about future demand and market conditions. Upon a subsequent sale or disposal of the impaired inventory, the corresponding reserve for impaired value is relieved to ensure that the cost basis of the inventory reflects any write-downs.

Inventories are summarized as follows:


	December 31
	2020		2019
Finished goods and service parts	$	269.0	$	276.2
Work in process	21.0		22.1
Raw materials	269.4		310.5
Total manufactured inventories	559.4		608.8
LIFO reserve	(50.0)		(48.9)
Total inventory	$	509.4	$	559.9