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Inventory
6 Months Ended
Jun. 30, 2015
Inventory Disclosure [Abstract]  
Inventory
INVENTORY

Inventory consists primarily of land in the process of development, undeveloped land, developed lots, completed homes, and raw land scheduled for development, primarily in Texas and Georgia. Inventory is valued at cost unless the carrying value is determined to be not recoverable in which case the affected inventory is written down to fair value. Cost includes any related pre-acquisition costs that are directly identifiable with a specific property so long as those pre-acquisition costs are recoverable at the sale of the property.

A summary of inventory is as follows (in thousands):
 
June 30, 2015
 
December 31, 2014
Completed home inventory and residential lots held for sale
$
64,820

 
$
47,048

Work in process
214,058

 
203,756

Undeveloped land
16,220

 
16,220

Land not owned under option agreements
5,874

 
7,279

Total Inventory
$
300,972

 
$
274,303



We capitalize interest costs incurred to inventory during active development and other qualifying activities. Interest capitalized as cost of inventory is charged to cost of sales as related homes, land and/or lots are closed. Interest incurred on undeveloped land is directly expensed and included in interest expense in our consolidated statements of income.

Interest costs incurred, capitalized and expensed were as follows (in thousands):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2015
 
2014
 
2015
 
2014
Interest capitalized at beginning of period
$
7,218

 
$
1,065

 
$
3,713

 
$
1,065

Interest incurred
3,548

 
526

 
7,348

 
830

Interest charged to cost of sales
(912
)
 

 
(926
)
 
(105
)
Interest charged to interest expense

 
(509
)
 
(281
)
 
(708
)
Interest capitalized at end of period
$
9,854

 
$
1,082

 
$
9,854

 
$
1,082