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Inventory And Land Held For Sale
 12 Months Ended
Dec. 31, 2013
Inventory Disclosure [Abstract]  
Inventory and land held for sale
Inventory and land held for sale

Major components of inventory at December 31, 2013 and 2012 were ($000’s omitted): 
 
2013
 
2012
Homes under construction
$
1,042,147

 
$
1,116,184

Land under development
2,189,387

 
2,435,378

Raw land
747,027

 
662,484

 
$
3,978,561

 
$
4,214,046



We capitalize interest cost into inventory during the active development and construction of our communities. Each layer of capitalized interest is amortized over a period that approximates the average life of communities under development. Interest expense is recorded based on the timing of home closings. In all periods presented, we capitalized all Homebuilding interest costs into inventory because the level of our active inventory exceeded our debt levels.

Information related to interest capitalized into inventory is as follows ($000’s omitted):
 
 
Years Ended December 31,
 
2013
 
2012
 
2011
Interest in inventory, beginning of period
$
331,880

 
$
355,068

 
$
323,379

Interest capitalized
154,107

 
201,103

 
221,071

Interest expensed (a)
(255,065
)
 
(224,291
)
 
(189,382
)
Interest in inventory, end of period
$
230,922

 
$
331,880

 
$
355,068

Interest incurred (b)
$
154,819

 
$
201,103

 
$
221,071



(a)
Interest expensed to Home sale cost of revenues for 2013, 2012, and 2011 included $2.9 million, $6.5 million, and $5.4 million, respectively, of capitalized interest write-offs related to land-related charges.
(b)
Homebuilding interest incurred includes interest on senior debt and certain other financing arrangements.

Land-related charges

We recorded the following land-related charges during the three years ended December 31, 2013:

 
2013
 
2012
 
2011
Land impairments
$
2,944

 
$
13,437

 
$
15,940

Net realizable value adjustments ("NRV") - land held for sale
3,606

 
1,480

 
9,844

Write-off of deposits and pre-acquisition costs
3,122

 
2,278

 
10,002

Total land-related charges
$
9,672

 
$
17,195

 
$
35,786



Land impairments

We record land impairment valuation adjustments to our communities within Homebuilding home sale cost of revenues. Our evaluations for impairments are based on our best estimates of the future cash flows for our communities. However, if conditions in our local markets worsen in the future or if our strategy related to certain communities changes, we may be required to evaluate our assets for further impairments or write-downs.

Net realizable value adjustments – land held for sale

We record net realizable value adjustments to land held for sale within Homebuilding land sale cost of revenues. During 2013, the decrease in the gross land held for sale and net realizable value reserve balances resulted primarily from the sale of land parcels, certain of which were previously impaired. Land held for sale at December 31, 2013 and 2012 was as follows ($000’s omitted):
 
 
2013
 
2012
Land held for sale, gross
$
70,003

 
$
135,201

Net realizable value reserves
(8,268
)
 
(44,097
)
Land held for sale, net
$
61,735

 
$
91,104



Write-off of deposits and pre-acquisition costs

We write off deposits and pre-acquisition costs when it becomes probable that we will not go forward with the land option agreement or recover the capitalized costs. We record write-offs of deposits and pre-acquisition costs within other expense, net.