2. Inventories

Inventories are valued at the lower of cost or estimated net realizable value, after provision for excess or obsolete items. Cost is determined on a weighted-average basis, which approximates the first in, first out (“FIFO”) method. The valuation of work-in-process, finished products, field inventory and consignment inventory includes the cost of materials, labor and production. Field inventory represents immediately saleable finished products inventory that is in the possession of the Company’s direct sales representatives and independent distributors. Consignment inventory represents immediately saleable finished products located at third party customers, such as distributors and hospitals.

Inventories were as follows:


(US$ in thousands)	September 30, 2012			December 31, 2011
Raw materials	$	9,210		$	10,115
Work-in-process		7,734			5,606
Finished products		45,718			49,141
Field inventory		38,041			39,400
Consignment inventory		7,085			7,551

		107,788			111,813
Less reserve for obsolescence		(26,966	)		(28,844	)

	$	80,822		$	82,969