2018 
Rm 		    2017 
Rm 		   
17.  INVENTORIES             
   Work in progress  980     537    
   Finished goods**  6 296     6 182    
   Merchandise  2 240     2 415    
   Other inventories  113     146    
   Total group  9 629     9 280    
   Amounts classified as held for sale  (37)    (823)   
   Total per statement of financial position  9 592     8 457    
   The value of inventories has been determined on the following bases:             
   First-in first-out and specific identification  8 398     7 169    
   Weighted average  1 194     1 288    
      9 592     8 457    
   The secured liabilities are included under trade and other payables (note 25)            
   Inventories encumbered under the floorplan facilities  1 385     1 532    
   Amount of write-down of inventory to net realisable value and losses of inventory  261     365    
   Amount of reversals of inventory previously written down*  36     30    
   Change in estimate of rebuilt component net realisable value provision**  130          
  * The reversal of inventory provisions arose due to changes in selling conditions in the current year against prior year estimates.
  ** Barloworld Equipment Southern Africa’s finished parts inventory includes rebuilt components. In prior years this segment experienced significant operational challenges which resulted in reduced margins earned on rebuilt components. These factors, together with considering inventory turns, were used in estimating the net realisable value (NRV) of rebuilt components. The segment has been in the process of re-organising, restructuring and improving efficiencies of the remanufacturing processes. The operational efficiency efforts undertaken resulted in the Rebuild Centre being certified by Caterpillar in April 2018. In order to receive certification the Rebuild Centre had to demonstrate excellence in quality, efficiency, capacity, image, administration and continuous improvements. This certification, together with operational efficiencies, has resulted in increased margins being earned on rebuilt components which management believes are sustainable into the foreseeable future.

Consequently, the conditions and circumstances of the rebuilding process have changed in the current year and there is new information available to support margins achieved on, and forecast demand for, rebuilt components. This has resulted in a change in determining the scale applied to estimating the NRV of rebuilt components and in the determination of inventory turns. This change in methodology to estimate the NRV provision recognised against rebuilt components is considered a change in estimate in accordance with IAS 8 Accounting policies, changes estimates and errors. This change has been accounted for prospectively in the current year.

Applying the previous methodology, the NRV provision against rebuilt components would have increased by R75 million in the year (income statement charge of R75 million). The revised estimate resulted in a reduction in the NRV provision against rebuilt components of R205 million. Therefore the net impact recognised in the income statement as income for the year was R130 million.