Inventory

9 Months Ended

Sep. 30, 2020

Inventories as of September 30, 2020 and December 31, 2019 are summarized in the following table:


	September 30, 2020		December 31, 2019
Finished goods	$	63,462	$	59,024
Contract assets	36,891		37,032
Work-in-process	4,612		3,728
Raw materials	12,302		18,677
Inventories - net	$	117,267	$	118,461

Inventories of the Company are valued at average cost or net realizable value, whichever is lower.

In accordance with adoption of ASU 2016-13, the Company evaluated and revised its policies relating to the allowance for credit losses as they pertain to contract assets, as these assets held in inventory will convert to trade receivables upon recognition of revenue for the contract to which they pertain.

In addition to contract-specific provisions for which reserves were historically established as a result of our contract review process, management also elected to implement a standard credit loss provision over any remaining contract assets considered to have a similar low risk of credit loss.

The development of these estimates is based on historic collection trends, accuracy of estimates within contract margin reporting, as well as the expectation that collection patterns, margin reporting, and bad debt expense will continue to adhere to patterns observed in recent years. These expectations were formed based on trends observed as well as current and expected future conditions. Management monitors and reviews the contributing factors to our reserve, and makes any appropriate revisions as they become necessary.