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INVENTORY - Note 5
 6 Months Ended
Jun. 30, 2016
Inventory Disclosure  
Inventory - Note 5

5. INVENTORY

Inventory consists of the following:

      June 30,     December 31,
(in thousands)     2016     2015
Raw materials   $ 585    $ 232 
Finished goods     533      630 
    $ 1,118    $ 862 

 

Our inventory consists of raw materials and finished goods assemblies. Inventory is is computed using first-in, first-out (FIFO) method and stated at the lower of cost and net realizable value. Management periodically assesses the need to account for obsolescence of inventory and adjusts the carrying value of inventory to its net realizable value when required.

In addition, we reduce the value of our inventory to its estimated scrap value when management determines that it is not probable that the inventory will be consumed through the normal course of business during the next twelve months. At June 30, 2016 and December 31, 2015, we recorded aggregate write-downs of $6.8 million and $6.9 million, respectively, offsetting inventory deemed to be obsolete or scrap inventory. From time to time, we may enter into arrangements to sell the obsolete or scrap inventory or enter into consignment agreements with third parties to sell the units, resulting in a gain in the period such transactions are realized.