XML 19 R8.htm IDEA: XBRL DOCUMENT v3.7.0.1
Inventory
6 Months Ended
Jun. 30, 2017
Inventory Disclosure [Abstract]  
Inventory
INVENTORY

Inventory consists of land in the process of development, undeveloped land, developed lots, completed homes, raw land scheduled for development, and land not owned under option agreements in Texas and Georgia. Inventory is valued at cost unless the carrying value is determined to not be 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, 2017
 
December 31, 2016
Completed home inventory and residential lots held for sale
$
109,093

 
$
127,679

Work in process
315,782

 
269,255

Undeveloped land
1,738

 
4,070

Land not owned under option agreements
7,977

 
9,293

Total Inventory
$
434,590

 
$
410,297



The Company capitalizes 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 condensed 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,
 
2017
 
2016
 
2017
 
2016
Interest capitalized at beginning of period
$
9,435

 
$
8,791

 
$
9,417

 
$
9,085

Interest incurred
885

 
817

 
1,778

 
1,525

Interest charged to cost of sales
(895
)
 
(699
)
 
(1,770
)
 
(1,701
)
Interest charged to interest expense

 

 

 

Interest capitalized at end of period
$
9,425

 
$
8,909

 
$
9,425

 
$
8,909