Physical Commodities Inventory

The Company’s inventories consist of finished physical commodities. Inventories by component of the Company’s Physical Commodities segment are shown below.



(in millions)	September 30, 2018		September 30, 2017
Physical Ag & Energy⁽¹⁾	$	114.7	$	65.1
Precious metals - held by broker-dealer subsidiary⁽²⁾	42.1		13.3
Precious metals - held by non-broker-dealer subsidiaries⁽³⁾	65.7		46.4
Physical commodities inventory	$	222.5	$	124.8

⁽¹⁾ Physical Ag & Energy maintains agricultural commodity inventories, including corn, soybeans, wheat, canola, coffee, cocoa, cotton, and others. The agricultural commodity inventories are carried at net realizable value, which approximates fair value less disposal costs, with changes in net realizable value included as a component of ‘cost of sales of physical commodities’ on the consolidated income statement. The agricultural inventories have reliable, readily determinable and realizable market prices, have relatively insignificant costs of disposal and are available for immediate delivery. Physical Ag & Energy also maintains energy inventory, primarily propane, gasoline, and kerosene, which are valued at the lower of cost or net realizable value.

⁽²⁾ Precious metals held by the Company’s subsidiary, INTL FCStone Ltd, a United Kingdom based broker-dealer subsidiary, is measured at net realizable value, with changes in net realizable value included as a component of ‘trading gains, net’ on the consolidated income statement, in accordance with U.S. GAAP accounting requirements for broker-dealers.

⁽³⁾Precious metals inventory held by subsidiaries that are not broker-dealers are valued at the lower of cost or net realizable value.

The Company has recorded lower of cost or net realizable value adjustments for certain precious metals inventory of $0.4 million and $0.7 million as of September 30, 2018 and 2017, respectively. The adjustments are included in ‘cost of sales of physical commodities’ in the consolidated income statements.