Inventories net

12 Months Ended

Dec. 31, 2021

Inventories net

Inventories net

2. Inventories, net

On July 1, 2021, the Company changed its accounting for inventory to burden the material at the time of purchase receipts.  Prior to July 1, 2021, the Company applied the material burden at the time the inventory was issued to work in progress.  The Company believes that this method improves financial reporting by better reflecting the current value of inventory on the consolidated balance sheets, by providing better matching of revenues and expenses.

The fiscal 2020 financial statements have been retrospectively adjusted to apply the new inventory change.  The cumulative effect of this change on periods prior to those presented herein resulted in a net decrease in accumulated deficit of approximately $1,158 as of January 1, 2020.

Inventories, which are presented net of allowance for slow-moving, excess, and obsolete inventory, consisted of the following:

	December 31,
	2021			2020 (as adjusted)
Finished goods	$	2,335	$	2,206
Work in process		4,527		3,672
Raw materials		10,116		4,667
	$	16,978	$	10,545

Changes in the allowance for slow-moving, excess, and obsolete inventory are as follows:

	Years Ended December 31,
	2021			2020 (as adjusted)
Balance, beginning of year	$	588	$	823
Charged to cost of sales		700		194
Disposal of inventory		-		(429	)
Balance, end of year	$	1,288	$	588

For the year ended December 31, 2020, the Company wrote off obsolete inventory that had been fully allowed for previously, which had no material impact to the Company’s consolidated balance sheets or consolidated statements of operations.

As a result of the retrospective application of this change in accounting method, the following financial statement line items within the accompanying fiscal 2020  Consolidated financial statements were adjusted as follows:

	As Originally Reported ($)			Effect of Change ($)			As Reported under Change in Accounting Principle  ($)
Consolidated Balance Sheets
Assets
Inventories, net as of December 31, 2020		9,441			1,104			10,545
Liabilities & Shareholders’ Equity
Accumulated deficit as of December 31, 2020		(6,797	)		1,104			(5,693	)
Consolidated Income Statements
Cost of goods sold:
Year ended December 31, 2020		26,055			54			26,109
Income before income taxes:
Year ended December 31, 2020		251			(54	)		197
Net income:
Year ended December 31, 2020		248			(54	)		194
Net income per share-basic and diluted:
Year ended December 31, 2020		0.02			-			0.02
Consolidated Statements of Cash Flows
Net income as of December 31, 2020		248			(54	)		194
Inventories allowance		126			68			194
Change in inventories		3,946			(14	)		3,932