6. Inventories

Inventories are stated at the lower of cost (first-in, first-out method) or market and consisted of the following (in millions):

	September 30,		June 30,
	2016		2016
Raw materials	$	78.1	$	59.2
Finished goods		74.8		87.2
	$	152.9	$	146.4

We record a write-down, if necessary, to reduce the carrying value of inventory to its net realizable value. The effect of these write-downs is to establish a new cost basis in the related inventory, which we do not subsequently write up. We also record a liability and charge to cost of revenue for estimated losses on inventory we are obligated to purchase from our contract manufacturers when such losses become probable from customer delays, order cancellations, or other factors.

In October 2016, we were notified by a customer that they have cancelled production of a smartphone model, which contains certain customer specific parts, due to safety issues. Due to the lack of forecasted demand, we have recorded additional inventory charges of approximately $2.8 million for our quarter ended September 30, 2016, which has been reflected in cost of revenue.