CSL Ltd Annual Report 2021

Note 4: Inventories 2021 US$m 2020 US$m Rawmaterials 1,309.1 876.8 Work in progress 1,249.6 1,361.1 Finished goods 1,221.9 1,271.6 Total inventories 3,780.6 3,509.5 Raw Materials Rawmaterials comprise collected and purchased plasma, chemicals, filters and other inputs to production that will be further processed into saleable products but have yet to be allocated to manufacturing. Work in Progress Work in progress comprises all inventory items that are currently in use in manufacturing and intermediate products such as pastes generated from the initial stages of the plasma production process. Finished Products Finished products comprise material that is ready for sale and has passed all quality control tests. Inventories generally have expiry dates and the Group provides for product that is short dated. Expiry dates for rawmaterial are no longer relevant once the materials are used in production. The relevant expiry date at this point then becomes that of the resultant intermediate or finished product. Inventories are carried at the lower of cost or net realisable value. Cost includes direct material and labour and an appropriate proportion of variable and fixed overheads. Fixed overheads are allocated on the basis of normal operating capacity. Net realisable value is the estimated revenue that can be earned from the sale of a product less the estimated costs of both completion and selling. The Group assesses net realisable value of plasma derived products on a basket of products basis given their joint product nature. Key Judgements and Estimates – Inventory Various factors affect the assessment of recoverability of the carrying value of inventory, including regulatory approvals and future demand for the Group’s products. These factors are taken into account in determining the appropriate level of provisioning for inventory. CSL Limited Annual Report 2020/21 117