3. Inventories

Inventories are valued at the lower of cost or market, after provision for excess, obsolete or impaired items which is reviewed and updated on a periodic basis by management. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at our manufacturing facility in Italy, cost is determined on a weighted-average basis, which approximates the first in, first out method (“FIFO”), due to the high turn-over rate of inventory at this location. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at our manufacturing facility in Texas, standard costs, which approximates actual cost on a FIFO basis, is used to value inventory. Standard costs are reviewed annually by management, or more often in the event circumstances indicate a change in cost has occurred. The valuation of work-in-process, finished products, field inventory and consignment inventory includes the cost of materials, labor and production costs. Field inventory represents immediately saleable finished products inventory that is in the possession of the Company’s direct sales representatives. Consignment inventory represents immediately saleable finished products located at third party customers, such as distributors and hospitals. Deferred cost of goods sold result from transactions where the Company has shipped product or performed services for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, the deferred revenues and associated cost of goods sold are recognized.

Inventories, net of reserves, were as follows:


(US$ in thousands)	June 30, 2013		December 31, 2012
			(Restated)
Raw materials	$	8,639	$	7,623
Work-in-process		8,112		7,886
Finished products		38,342		28,308
Field inventory		24,815		22,629
Consignment inventory		5,955		6,155
Deferred cost of goods sold		9,078		10,772

Total Inventory	$	94,941	$	83,373